Deutsche Admits Misleading Clients
Deutsche Admits Misleading Clients

Deutsche Admits Misleading Clients

Deutsche Admits Misleading Clients

Deutsche Bank AG agreed to pay $37 million and admit to misleading customers about its dark pool stock-trading platforms to settle a joint state and federal probe, bringing the bank a step closer to resolving several potentially costly legal challenges in the US.
The bank will admit to violating state and federal securities laws over a two-year period by failing to address known technical problems with its proprietary dark-pool ranking model, the US Securities and Exchange Commission and New York Attorney General Eric Schneiderman said Friday, Bloomberg reported.
“Misleading and self-serving statements that defraud investors will not be tolerated,” Schneiderman said. “Electronic order routing systems that route investor orders to various markets, including dark pools, are a part of modern equities trading, and companies that promote their routing capabilities must do so truthfully.”
Despite Deutsche Bank Chief Executive Officer John Cryan’s push in February to “speedily” resolve legal and regulatory matters, the Frankfurt-based lender continues to grapple with concerns that many of its global rivals have put behind them—including US probes into its mortgage-backed securities business and into whether its traders colluded to manipulate currency rates.
Deutsche Bank said in September that the US Justice Department had opened negotiations by seeking as much as $14 billion to settle a probe tied to mortgage securities. That would be on top of the more than $9 billion in fines and settlements it has paid since the start of 2008, according to data compiled by Bloomberg.
The bank is also being investigated by US and UK authorities over whether its internal controls failed to catch some $10 billion in transactions that may have moved money out of Russia, people familiar with the matter have said.
Friday’s civil agreement extends a string of settlements in probes of whether banks properly disclosed how trades were executed or who was on the other side of them with the private platforms.
In January, Barclays Plc agreed to pay $70 million and Credit Suisse Group AG $84.3 million to settle allegations by the SEC and Schneiderman of wrongdoing in their dark pools. The settlements hinged on whether the banks adequately disclosed how their venue worked to their customers.


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