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Deutsche Bank Agrees to $2.5M Fine Over Swap Reporting

Zacks Equity Research
Updated

Deutsche Bank AG DB was penalized by the U.S. Commodity Futures Trading Commission (“CFTC”) for falling short of adequately reporting its swaps transactions from in or about January 2013 until July 2015. The German bank will have to shell out $2.5 million in civil fine.

The bank did not appropriately report cancellations of swap transactions in all asset classes during the mentioned timeframe. The reporting violations and errors and omissions in its swap reporting resulted in the spreading of misinformation to the market through the real time public tape and the regulator.

According to the CTFC, Deutsche Bank violated the CTFC regulations, which requires having a proper swaps supervisory system in place. Moreover, though the bank was aware of the deficiencies in its swaps-reporting, it failed to provide a timely notice to its swap data repository and correct the reporting errors until the bank was notified of the investigation.

This is the CFTC's first action enforcing the new Dodd-Frank prerequisites, which require real-time public reporting of swap transactions and the reporting of swap data to repositories. Deutsche Bank neither admitted nor denied wrongdoing.

CFTC Director of Enforcement Aitan Goelman said, “When reporting parties fail to meet their reporting obligations, the CFTC cannot carry out its vital mission of protecting market participants and promoting market integrity.”

The reporting failures were in part the result of Deutsche Bank’s swaps supervisory system, the CFTC said. The bank did not have an adequate system in place until April 2014, “well after its reporting obligations went into effect in December 2012,” the order said.

Currently, Deutsche Bank holds a Zacks Rank #2 (Buy). Other similar-ranked foreign banks include Mitsubishi UFJ Financial Group, Inc. MTU, Mizuho Financial Group, Inc. MFG and Sumitomo Mitsui Financial Group, Inc. SMFG.

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DEUTSCHE BK AG (DB): Free Stock Analysis Report
 
MITSUBISHI-UFJ (MTU): Free Stock Analysis Report
 
MIZUHO FINL-ADR (MFG): Free Stock Analysis Report
 
SUMITOMO-MITSUI (SMFG): Free Stock Analysis Report
 
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Zacks Investment Research