Deutsche Bank AG was hit with the Federal Reserve’s first major fine for failing to ensure traders abide by the Volcker Rule’s ban on risky market bets — and will also pay even more for letting currency desks chat online with competitors, allegedly revealing positions.
The simultaneous sanctions, totaling almost $157 million, fault lax oversight of traders that persisted into last year. The company — which raised $8.5 billion from investors this month to recapitalize — admitted to the Fed in March 2016 that it still lacked adequate systems for keeping tabs on dealings that might run afoul of the Volcker ban.
“Significant gaps existed across key aspects of Deutsche Bank’s Volcker Rule compliance program,” the Fed said Thursday, fining the firm $19.7 million for the lapses. As for chats, the bank failed to detect that currency traders engaged in “unsafe and unsound conduct,” disclosing some positions or talking about coordinating strategies, the Fed said. The company will pay $136.9 million for that.