Anti-Financial Crime & Financial Crime Compliance
Regulatory Intelligence Leadership | Insight | Network

Banking, Financial Services

Deutsche Bank investors seek damages after multi-million dollar payout

By Elizabeth Hearst

Deutsche Bank investors are suing the bank and its CEO over its multi-million dollar compliance fine issued in relation to its dealings with Jeffrey Epstein. 

Investors are suing Deutsche Bank and its CEO Christian Sewing, alleging that the bank made false and misleading statements before it agreed to pay the $150 Million fine, Reuters reports. 

Deutsche Bank was slapped with the multi-million dollar fine in relation with its connection with convicted sex offender Jeffrey Epstein and its dealings with Danske Estonia bank and the Federal Bank of the Middle East (FBME). 

Superintendent of Financial Services, Linda Lacewell stated that the bank failed to “adequately monitor the activity of their customers that the Bank deemed to be high risk. In the case of Jeffrey Epstein, despite knowing Mr. Epstein’s terrible criminal history, the Bank inexcusably failed to detect or prevent millions of dollars of suspicious transactions”. 

According to the complaint filed in the US District Court in Newark, New Jersey, defendants seek unspecified damages for Deutsche Bank’s failure to “remediate deficiencies relating to its anti-money laundering (AML) compliance, its disclosure controls, procedures and internal control over financial reporting”. 

The complaint specifies that the bank “failed to properly monitor customers that were high risk” including Jeffrey Epstein, and two correspondent banks, Danske Estonia and FBME Bank that were involved in prior scandals. 

The bank is accused by investors that these dealings “would have a material negative impact on the Bank’s financial results and reputation”, and as a result the Bank’s public statements were “materially false and misleading”. 

Speaking after being handed down the fine, Deutsche Bank CEO Christian Sewing said, “Mr. Epstein should never have been our client”, but the Bank had “invested a lot into anti-financial crime and into compliance” since then. 

The bank declined to comment on the lawsuit which names Deutsche Bank’s finance director James von Moltke and former CEO John Cryan. According to court documents filed last week, the named plaintiff is Ali Karimi.

AML Intelligence
We hope you enjoyed reading this article

If you would like unlimited access to AML Intelligence premium articles, newsletter delivered twice a week, access to our Global Bank Fines and Penalties database, free access to Boardroom Series events and much more, select one of our subscription options and become a subscriber!