Professor Elam

Friday April 21, 2017

Deutsche Bank pays various fines for lack of oversight.

Deutsche Bank AG will pay $157 million to settle separate accusations that it was unaware of its foreign-exchange traders chatting online with competitors and that it hasn’t properly complied with Volcker Rule constraints on investments, the Federal Reserve said Thursday.

In unrelated enforcement actions, the Fed fined the Frankfurt-based lender $136.9 million for faulty oversight of its FX traders and $19.7 million for failing to keep tabs on the kind of trading banned by the Volcker Rule — the first major enforcement action by a U.S. banking regulator over that core component of the 2010 Dodd-Frank Act.

More from Bloomberg.com: South Korea Tells Trump It's Actually Never Been a Part of China

“We are pleased to resolve these civil enforcement matters with the Federal Reserve,” said Renee Calabro, a Deutsche Bank spokeswoman. She declined to comment further on the latest in a series of government actions against the company. In December, the lender agreed to settle a U.S. mortgage-backed securities probe for $7.2 billion.

Alert accounting students will recall from my case write up on KPMG that Deutsche Bank was heavily involved in promoting KPMG's tax shelters.

This is a pattern we see repeated again and again. A government passes restrictive legislation hoping to curtail improper activities. The same bad actors break the new rules. Then fines are levied, no one admits to anything, and life resumes as usual.

Criminal law imposes a rule such that is the same person is convicted multiple times for the same thing, a long prison sentence is imposed on the idea that the person is a continuing threat to society. How about a Big Bitch rule like that for financial institutions?