In all the long and varied annals of Deutsche Bank’s legal and regulatory foibles, we may have a first. Having struck a sweetheart deal with its old client’s Justice Department just days after his coup attempt failed, it may have managed to violate it in record time.
The Justice Department has informed Deutsche Bank AG that the German lender may have violated a criminal settlement when it failed to tell prosecutors about an internal complaint in its asset-management arm’s sustainable investing business, according to people familiar with the matter…. That earlier criminal settlement was struck in January and related to Deutsche Bank’s involvement in overseas corruption and market-manipulation.
The thing about such deals is they make rather a big deal about keeping your nose clean and, failing that, fessing up in a timely manner. Since the former is all-but-impossible for Deutsche Bank, the latter becomes rather important, and, well….
U.S. authorities learned of the issue in an August Wall Street Journal article, rather than from the bank, which had ongoing disclosure and compliance obligations under the earlier criminal settlement, according to people familiar with the matter.
And the thing about deferred prosecution agreements is, you know, they’re just that: deferred, unless you live up to the terms of the agreement. And the people running the DoJ today are a bit less inclined to look favorably on Deutsche’s failings than their predecessors.
If U.S. authorities pursue Deutsche Bank for a breach of the agreement, the bank could lose its earlier deal and, in the worst case, face indictment and prosecution, according to the agreement…. Justice officials have said in recent months that they plan to call out companies for breaches of deferred-prosecution agreements, which allow companies to avoid a guilty plea but require them to admit wrongdoing. Some critics argue the leniency deals are used too often, particularly when the government doesn’t bring charges against employees who committed the misdeeds.
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