View more on these topics

Deutsche Bank fined over £500m after Russia money laundering probe

FCA logo new 620x430.jpg

The FCA has fined Deutsche Bank more than £163m for anti-money laundering failures between January 2012 and December 2015.

The fine is the largest ever imposed by the FCA or the FSA for anti-money laundering control failings.

The bank has also been fined $425m (£339.9m) by the New York State Department of Financial Services.

A statement from the FCA says Deutsche Bank failed to properly oversee new customer relationships and the booking of global business in the UK.

As a result of its inadequate controls, Deutsche Bank was used by unidentified customers to transfer approximately $10bn, of unknown origin, from Russia to offshore bank accounts in a manner the FCA says is “highly suggestive of financial crime”.

The front office of Deutsche Bank’s Russia-based subsidiary, DB Moscow, carried out more than 2,400 pairs of trades – called mirror trades – between April 2012 and October 2014.

The mirror trades were used by customers of Deutsche Bank and DB Moscow to transfer more than $6bn from Russia, through Deutsche Bank in the UK, to overseas bank accounts, including in Cyprus, Estonia, and Latvia.  The orders for both sides of the mirror trades were received by DB Moscow, which executed both sides at the same time.

The customers on the Moscow and London sides of the mirror trades were connected to each other and the volume and value of the securities was the same on both sides.

The FCA says the purpose of the mirror trades was the conversion of roubles into US dollars and the “covert” transfer of those funds out of Russia, which is highly suggestive of financial crime.

A further $3.8bn in suspicious “one-sided trades” also occurred. The FCA believes some, if not all, of an additional 3,400 trades formed one side of mirror trades and were often conducted by the same customers involved in the mirror trading.

FCA enforcement and market oversight director Mark Steward says: “Financial crime is a risk to the UK financial system. Deutsche Bank was obliged to establish and maintain an effective anti-money laundering control framework. By failing to do so, Deutsche Bank put itself at risk of being used to facilitate financial crime and exposed the UK to the risk of financial crime.

“The size of the fine reflects the seriousness of Deutsche Bank’s failings. We have repeatedly told firms how to comply with our anti-money laundering requirements and the failings of Deutsche Bank are simply unacceptable. Other firms should take notice of today’s fine and look again at their own  procedures to ensure they do not face similar action.”

Deutsche Bank agreed to settle at an early stage of the FCA’s investigation and qualified for a 30 per cent discount in its fine, which otherwise would have been £229,076,224.

The discount does not apply to the £9.1m in commission that Deutsche Bank generated from the suspicious trading, which has been disgorged as part of the overall penalty meaning that the firm has received no financial benefit from the breach.

The FCA statement says: “Deutsche Bank was exceptionally cooperative with the FCA during this investigation and has committed significant resources to a large scale remediation programme to correct the deficiencies in its anti-money laundering control framework and customer files.”


FCA logo new 620x430.jpg

Ex-Deutsche Bank trader gets green light to sue FCA

A former Deutsche Bank trader has been told he can bring a civil case against the FCA despite facing trial over Libor manipulation. In April Deutsche Bank was fined a total of £1.7bn by international regulators rigging Libor and Euribor. Bloomberg reports Christian Bittar is suing the regulator over the final notice against Deutsche Bank, […]

FCA interior logo 620x430

FCA bans former Deutsche Bank trader over Libor fraud

The FCA has banned a former Deutsche Bank trader from the UK financial services industry following a criminal fraud conviction in the US. On 8 October 2015, Michael Curtler pleaded guilty before the United States District Court for the Southern District of New York for his role in a conspiracy to manipulate Deutsche Bank’s US […]


DB transfer shouldn’t be all-or-nothing

By Steve Webb, director of policy In my recent discussions with advisers, a hot topic has been the growing number of people interested in transferring their defined benefit pension rights into a defined contribution pension scheme. With many pension schemes offering eye-watering transfer values, this is likely to be an area of increasing interest. Yet […]


News and expert analysis straight to your inbox

Sign up


There are 4 comments at the moment, we would love to hear your opinion too.

  1. So next step – are these funds going to be traced & if illicit, action against the perpetrators also taken?

  2. In the MM report above there is no suggestion any transactions went through New York and yet their Dept. of Financial Services levies a fine at double the rate of the FCA in London. Why?

  3. What makes me angry is that these people get discounts on there fines !!!! 30% in this case

    un…. bloody…… believable

  4. more here –

    basically the US fine is for the same process done in New York as done in London

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and thought leadership.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm