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Stories of Interest
- Canada's CIBC Completes $5Bn PrivateBancorp Buy
- Word ‘Women’ Literally Never Appears in U.S. Senate’s 142-Page Health-Care Bill
- Stephen Pierce, Goldman Sachs Global Head of Equity Markets, To Retire
- Al Gore 'Not Very Smart,’ But Became Filthy Rich Using Simple Investing Formula - Charlie Munger
- U.S. Regulators, Lawmakers Support Volcker Rule Revamp at Hearing
- Morgan Stanley Opts for Frankfurt as New EU Hub
- A New Risk for Goldman, Morgan Stanley in Stress Tests (subsc reqd)
- A Trump Bump for Law Firm of President’s Lawyer - Kasowitz Benson Torres
- JPMorgan, BofA, Goldman, Citi, Wells Fargo Pass Fed's Stress Test
- Blackstone Stock Still Trading at $31 - Its IPO Price From 10 Years Ago
- NJ Resident and NY-Based Global FX Club Charged with Solicitation Fraud, Misappropriation - CFTC
- Senate Republicans Release Plan to Replace Obamacare - The Details
- Berkshire Hathaway Throws $1.5Bn Lifeline to Canada's Home Capital
- Inside Nomura: Day in the Life of a Junior Banker
- Inside Travis Kalanick’s Resignation as Uber’s C.E.O.
- Creative Planning, KS Investment Firm, Spurring Change on Wall Street
- SEC Obtains Judgment Against Attorney Who Defrauded Escrow Clients
- SEC Files Fraud Charges Against Stock Promoters in Market Manipulation Scheme
- Power Lunches and Dinners in New York, London, Washington
- Banks to Cut $1.2Bn in Research Spending, Analyst Jobs - McKinsey
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NEWSLETTERS & ALERTS
Federal Reserve Fines Deutsche Bank $157Mn for Forex, Supervisory Violations
[Photo: By Björn Laczay, from Moosburg, Germany / Flickr]
Deutsche Bank agreed to pay $157 million to settle Federal Reserve charges that bank foreign exchange traders had used chat rooms to communicate with other banks, and thus violated both foreign exchange rules and Volcker rules:
- $20 million for having lax supervision i.e., failed to detect and prevent its forex traders from using chat rooms; and,
- $137 million for having disclosed some positions and for coordinating trading strategies with other banks.
Regulators based their findings, in part, on transcripts of bank traders communicating in online chat rooms, which emerged more than a year ago.
FIRST VOLCKER RULE TRADING INFRACTION. What makes this settlement significant is the fact that Deutsche Bank is the first big bank to be fined by the Federal Reserve under the Volcker Rule’s proprietary trading ban. Big bank traders are now restricted to assisting clients in buying or selling securities, and may derive profits from spreads or price moves – although differentiating between proprietary trading and market making can be difficult.
ANOTHER REGULATORY INVESTIGATION. Deutsche Bank faces ongoing investigation by the New York State Department of Financial Services (NYSDFS) which has been looking into whether the bank used algorithms on trading platforms to front-run or otherwise take advantage of clients.