Deutsche Bank Facing Record Fine from German Watchdog – What’s the Price

Germany's watchdog imposed a EUR 23.05 million penalty to Deutsche Bank AG for violating several regulatory requirements under German law. According to the Authority, the company breached organisational requirements under the German Securities Trading Act in connection with the sale of derivatives. In addition, its Postbank branch disregarded the obligation to record investment advice and repeatedly failed to comply with the requirements of the German Payment Accounts Act regarding the account switching service.

Postbank – a branch of Deutsche Bank AG – violated the requirement to record telephone conversations in connection with investment services. Exceptions to this rule were granted during the COVID-19 pandemic. After they expired, however, the company at times failed to take measures to ensure that the content of investment advice given by telephone was once again electronically recorded.

BaFin stated Following allegations relating to the sale of currency derivatives in Spain, Deutsche Bank AG took too long to investigate the infringements and remedy the shortcomings. The sale of derivatives led to sanctioning proceedings initiated by the Spanish National Securities Market Commission (CNMV). The company did not make appropriate organisational arrangements to speed up the investigation of the breaches of the law and to implement measures to remedy the situation.

BaFin has addressed all three issues in administrative fine proceedings. The total fine of EUR 23.05 million comprises EUR 14.8 million for the violations relating to derivatives sales, EUR 4.6 million for the violations relating to telephone recording and EUR 3.65 million for the violations relating to the switching service.

About BaFin

BaFin is Germany's national financial regulatory authority. BaFin acts in the public interest. Its main objective is to ensure the proper functioning, stability and integrity of Germanys financial system. Bank customers, insurance policyholders and investors should be able to trust the financial system.

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