Deutsche Bank discloses extension of monitorship and terms of its DPA

On March 11, 2022, Deutsche Bank Aktiengesellschaft (Deutsche Bank), a multinational financial services company based in Germany, disclosed in a Form 20-F SEC filing that the US Department of Justice (DOJ) had determined that Deutsche Bank violated a deferred prosecution agreement (DPA) that Deutsche Bank had entered into on January 8, 2021 to resolve allegations that it had violated the US Foreign Corrupt Practices Act (FCPA) and engaged in commodities fraud.

According to Deutsche Bank’s Form 20-F disclosure, the DOJ informed Deutsche Bank of its violation on February 28, 2022, which was the result of Deutsche Bank’s untimely reporting of certain unspecified allegations relating to Environmental, Social, and Governance (ESG)-related information at Deutsche Bank subsidiary DWS Group GmbH & Co. KGaA (DWS).  As a result, Deutsche Bank agreed with the DOJ to extend its existing monitorship and “abide by the terms of a prior deferred prosecution agreement” until February 2023, to allow time for the monitor to certify to Deutsche Bank’s implementation of certain internal controls.  The “prior deferred prosecution agreement” mentioned by Deutsche Bank in the Form 20-F disclosure is a reference to a 2015 DPA with the DOJ involving criminal violations arising from Deutsche Bank’s manipulation of the London Interbank Offered Rate.  The Form 20-F also states that the DOJ reserved all rights to take further action regarding the 2021 DPA if it deems necessary.

As part of its January 8, 2021 DPA (as well as its resolution of a related investigation by the US Securities and Exchange Commission), Deutsche Bank had agreed to pay more than $130 million in connection with allegations that, between at least 2009 and 2016, Deutsche Bank had violated the FCPA by entering into contracts with third-party “Business Development Consultants” (BDCs), which it used to make improper payments to government officials in numerous countries, including Saudi Arabia, Abu Dhabi, and Italy.  Deutsche Bank allegedly continued to make such payments despite its audit function issuing a report in 2009 identifying that a lack of oversight over the BDC arrangements created risks that they could be used for corrupt purposes.  According to the January 8, 2021 DPA, Deutsche Bank also engaged in commodities fraud when its employees and agents in London, Singapore, and New York placed fraudulent orders to buy and sell precious metals futures contracts, which artificially altered the supply of and demand for such contracts, thus manipulating the prices for such contracts and deceiving other traders.

Form 20-F | 2021 DPA

 
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