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Screenshot of a breaking news alert e-mail from Q2 2017
Several months have passed since New York’s Department of Financial Services first announced it was examining the activities of investment giant Deutsche Bank AG (FRA:DBK) over suspected money laundering.
According to a report by the Financial Times, the US Department of Justice (DoJ) and New York’s Department of Financial Services (NYDFS) are widening the scope of the investigation and are now looking into possible violations of sanctions imposed on Russia in relation to the annex of Crimea.
The regulators are investigating some of transactions that allegedly involved US dollars and an ex-banker who is a US citizen.
The focus of the probe is on “mirror trades”, in which Russian clients of the bank purchased securities in Russian rubles via Deutsche Bank’s Moscow office and then sold identical ones for foreign currencies, including US dollars, through the bank’s London office.
The DoJ and DFS are investigating mirror trades worth $6 billion, according to people familiar with the matter.
The US regulators are particularly focused on Tim Wiswell, a US citizen who was at the helm of Deutsche Bank’s Russian equities desk and was placed on leave in connection with an internal probe launched at the bank, the sources told the FT.
In addition, the US authorities are said to be examining whether the bank had implemented adequate compliance programs in relation to Russian sanctions and whether it provided accurate information to regulators.
The US authorities are also checking whether the suspicious trades enabled Deutsche Bank’s Russian clients to illegally transfer funds overseas.