Deutsche Bank fined for misleading customers

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Danny McCance



13 Feb 2018 12:03pm

Traders for Deustche Bank generated profits at the expense of its customers


The global investment bank has agreed to repay customers $3.7m and pay a $750,000 penalty after the US Securities and Exchange Commission SEC issued an enforcement order over misleading sales.

The SEC claimed that Deustche Bank failed to have compliance and surveillance procedures in place to adequately detect and prevent misconduct, leading to customers being misled and paying too much.

The investigation by the SEC found that traders and salespeople at Deutsche Bank Securities used false and misleading statements when selling commercial mortgage-backed securities (CMBS).

Employees were found to have misrepresented how much they had originally paid for the products during negotiations with customers.

The SEC pointed to failures by former head trader of the CMBS trading desk Benjamin Solomon, who it said had failed to react appropriately upon learning of the misconduct.

Alongside a 12-month suspension from the securities industry, Solomon will also pay a $165,000 penalty.

“Deutsche Bank and Solomon failed to keep watch as traders generated profits for the firm at the expense of CMBS customers by misrepresenting purchase prices and other important details,” Daniel Michael, chief of the SEC Enforcement Division’s Complex Financial Instruments Unit, said.

Last month, Deutsche Bank was fined more than half a billion pounds by UK and US regulators over alleged money laundering in Russia.






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