US Banking Authorities Fine Deutsche Bank $258Mln

“The firm did not have sufficient policies and procedures to ensure that activities conducted at its offices outside of the United States complied with U.S. sanctions laws”, the Federal Reserve and New York State Department of Financial Services (NYDFS) announced jointly.

New York’s top financial regulator said it would levy a $200 million penalty on the German lender and require it to fire six employees allegedly involved in the scheme.

Deutsche Bank said it ended the outlawed transactions several years ago and terminated all business dealings with the countries and financial entities involved.

“For example, a relationship manager who did significant business with Iranian and Syrian customers complained to his boss that colleagues in the Middle East ‘participated in a major conference call with senior management of [Deutsche Bank New York] and provided an overview of DB’s account activities with Syria outside the U.S”. Under the former, its overseas employees handling payment messages would remove any information indicating a connection to a sanctioned party from the message before passing it on to a corresponding USA bank.

Department of Financial Services acting superintendent Anthony Albanese said the regulator was committed to investigating and pursuing sanctions violations and money laundering at financial institutions.

A related criminal investigation into the conduct by New York federal prosecutors and the Manhattan District Attorney’s office is ongoing, according to a person familiar with matter.

It’s the latest in a series of hard revelations for the bank. The French bank processed more than $32 billion in payments through its New York branch between 2003 and 2008 on behalf of Sudanese, Iranian, Burmese and Cuban entities, regulators said.

Representatives who chipped away at the illicit exchanges must not work with the bank once more, the Federal Reserve said.

Deutsche Bank employees developed ways to get around the rules for customers whose transactions in dollars were sent to the United States, including at Deutsche Bank New York. The bank will also install an independent monitor, DFS said.

Deutsche Bank welcomed the closure of the case. Last year, BNP Paribas SA paid nearly $9 billion and pleaded guilty to violating sanctions laws. Deutsche Bank has also disclosed an inquiry into whether it colluded to rig benchmark foreign-exchange rates and an investigation into potential manipulation of precious-metals prices.