Thu. Mar 4th, 2021

Regulation HK

Financial Regulator

US Authorities Probe Deutsche Bank Dealings With 1MDB

2 min read

The DOJ probe is looking into whether Deutsche Bank failed to comply with US AML or foreign bribery laws in the course of raising $1.2bn for 1MDB in 2014.

The US DOJ (Department of Justice) is investigating Deutsche Bank in connection with its dealings with Malaysian state fund 1MDB, reports the Financial Times.

The investigation centres on a former colleague of ex Goldman Sachs banker Tim Leissner, who last year admittedto conspiracy charges linked to money laundering and foreign bribery. Goldman Sachs helped 1MDB raise USD 6.5 billion in 2012 and 2013, much of which has gone missing.

The DOJ expects to start negotiating with Goldman Sachs soon to potentially resolve a criminal probe in relation to 1MDB. Malaysia is also pursuing criminal charges and compensation from the bank.

Leissner’s former colleague Ms Tan Book-Kee also worked to arrange deals for 1MDB at Goldman. In 2013, she moved to Deutsche Bank, where she had further dealings with the Malaysian state fund as Asia Pacific head of the financial institutions group.

Tan left Deutsche Bank last year after the bank discovered communications between her and Malaysian financier Jho Low, who has been described as the central player in the 1MDB scandal. Tan now works for Hong Kong insurer FWD Group.

According to the FT, the DOJ’s probe is looking into whether Deutsche Bank failed to comply with US anti-money laundering or foreign bribery laws in the course of raising money for 1MDB, including USD 1.2 billion in 2014. The probe was first reported by the Wall Street Journal.

“Deutsche Bank has cooperated fully with all regulatory and law enforcement agencies that have made inquiries relating to 1MDB,” the bank told Bloomberg in an emailed statement, pointing to a civil forfeiture filings by the DOJ that suggest that the bank was misled by 1MDB.

“As stated in asset forfeiture complaints filed by the US Department of Justice, 1MDB made ‘material misrepresentations and omissions to Deutsche Bank officials’ in connection with 1MDB’s transactions with the bank. This is consistent with the bank’s own findings in this matter,” it said.

The investigation into Deutsche Bank comes as it seeks to dramatically overhaul its business following a decade marred by more than USD 18 billion in fines and other legal costs, raids on the bank’s headquarters, subpoenaed documents and dozens of probes.

Deutsche Bank has announced plans to cut some 18,000 jobs globally and exit some business lines, including its global equities businesses, as it seeks to improve profitability.

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