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As you’d imagine for an operation that’s been in seemingly terminal decline for as long as Deutsche Bank, it does a lot of things wrong. But, then again, who doesn’t? The bank Deutsche’s former CEO once idolized has certainly stepped in it a few times. Even the House of Dimon makes the occasional unforced error.

No, what makes Deutsche Bank such a special, hopeless case is not that it makes mistakes. It’s that it makes the same mistakes, over and over and over again, before getting ordered to do something about the endless making of that type of mistake, and then fails to do even that, establishing a new vicious cycle of meta-mistakes, on and on, ad infinitum. Consider, for instance, the Germans’ little problem with money laundering, as we have, ad infinitum.

Of course, Deutsche Bank has been laundering money for quite a long time, indeed. And, occasionally, it gets caught in less than a half-century, as when it helped the Russians wash money through mirror trades or Denmark via Estonia, or with whatever it helped President Trump do over the years, or when it allegedly got involved in the 1MDB scandal, or when the cops pulled up outside headquarters for a looksee. And every time, the authorities issue a fine and extract a solemn promise from Deutsche to do something about its anti-money laundering controls, which it then fails to do or fails to do sufficiently, leading to further fines for that, but apparently no further work on the underlying problem, which is Deutsche Bank’s absolute inability to detect or otherwise do anything about the money laundering it is or could be doing.

Apparently concerned that it’s not giving its compliance and legal departments enough work to do on that front, however, Deutsche Bank has decided that spoofing would make a splendid concurrent sequel to its ongoing AML haplessness. The bank began this latest exercise in illicit incompetence back in 2015, when it promised to do a better job keeping track of and reporting its swaps trading activities. This weakness in detection and reporting was eagerly seized upon by trader David Liew, who had been putting into practice the skills he learned at the feet of the “Legend,” allegedly alongside a couple of colleagues, for a couple of years already. And it would still be another couple of years before he was caught, not, apparently, by Deutsche itself, but by the FBI. And, of course, immediately after promising to do better, Deutsche did the opposite.

The charges stem from an issue in 2016, when an unprecedented outage in the bank’s swap reporting platform kept Deutsche unable to report data for multiple asset classes for five days, exacerbating existing report problems at the firm, the CFTC said. In 2015, Deutsche agreed to a CFTC order to improve its internal controls after being charged with failures in swaps reporting.

Oh, and also, obviously, there was even more spoofing than we were aware of.

Deutsche agreed to pay a $1.25 million penalty to settle the allegations that two of the bank’s traders engaged in numerous instances of a type of market manipulation called “spoofing” in Treasury futures and Eurodollar futures contracts on CME, the bank said in a statement…. “As reflected in both the settlement orders, we have taken meaningful steps to enhance our controls and are pleased to put these matters behind us,” Deutsche Bank spokesperson Dan Hunter said in an emailed statement.

Given your employer’s track record, we wouldn’t be so sure, Dan.

Deutsche Bank to pay $10 million over spoofing charges, reporting failures: CFTC [Reuters]



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