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Home / News / Business News / Deutsche Bank reaches $7.2 billion settlement with US regulators
  • Business

    Deutsche Bank reaches $7.2 billion settlement with US regulators

    Vijaya
    Written by
    Vijaya
    Mail
    Last updated on Dec 23, 2016, 06:33 pm
    Deutsche Bank reaches $7.2 billion settlement with US regulators
  • Deutsche Bank has reached a settlement of $7.2 billion with the Department of Justice in the US (DoJ) over an investigation into the mortgage-backed securities.

    The agreed sum is far lower than the $14 billion the US had asked the bank to pay in September.

    The German bank will pay a civil penalty of $3.1 billion and provide $4.1 billion in compensation to customers.

  • In this article
    Mortgage-related securities scandal and 2008 financial crisis Penalties on US banks for mortgage-related securities fraud Deutsche Bank reaches $7.2 billion settlement with US regulators Credit Suisse agrees to a $5.28 billion settlement DoJ sues Barclays for mortgage securities fraud More European banks under investigation
  • Background

    Mortgage-related securities scandal and 2008 financial crisis

    Mortgage-related securities scandal and 2008 financial crisis
    Credits:
  • Mortgage-backed securities scandal dates back to 2005, when banks gave mortgages to unqualified borrowers, repackaged those loans as safe investments and sold the risk on to investors.

    The sale of residential mortgage-related securities played a major role in the 2008 financial crisis.

    Several US banks were investigated including the likes of JP Morgan, Morgan Stanley, Goldman Sachs; they have all been punished.

  • Data

    Penalties on US banks for mortgage-related securities fraud

  • In 2013, JP Morgan Chase was ordered a fine of $13 billion and in 2014, Bank of America paid $16.7 billion. Citigroup was given $12 billion penalty which has been reduced to $7 billion. In Jan 2016, Goldman Sachs settled for $5.1 billion.

  • 23 Dec 2016

    Deutsche Bank reaches $7.2 billion settlement with US regulators

    Deutsche Bank reaches $7.2 billion settlement with US regulators
  • Deutsche Bank has reached a settlement of $7.2 billion with the Department of Justice in the US (DoJ) over an investigation into the mortgage-backed securities.

    The agreed sum is far lower than the $14 billion the US had asked the bank to pay in September.

    The German bank will pay a civil penalty of $3.1 billion and provide $4.1 billion in compensation to customers.

  • 23 Dec 2016

    Credit Suisse agrees to a $5.28 billion settlement

    Credit Suisse agrees to a $5.28 billion settlement
  • Swiss bank Credit Suisse has also agreed to pay $5.28 billion to settle its dispute with US authorities over similar mortgage-backed securities lawsuit.

    It will pay $2.48 billion as fine to settle the claims and would pay $2.8 billion over 5 years as consumer compensation.

    These are the first settlements in a string of mortgage-related lawsuits by the DoJ for European banks.

  • 23 Dec 2016

    DoJ sues Barclays for mortgage securities fraud

    DoJ sues Barclays for mortgage securities fraud
  • The US DoJ sued British bank Barclays for alleged mortgage securities fraud, after the two sides failed to reach a settlement.

    The lawsuit is a rare for big banks which generally settle with the government rather than risk long-drawn litigation, and a possible trial.

    According to the complaint, Barclays allegedly sold $31 billion in securities and more than half of the underlying loans defaulted.

  • Information

    More European banks under investigation

  • More European banks are also under investigation over their role in mortgage-backed securities business including HSBC, UBS Group, and Royal Bank of Scotland. US banks with ongoing investigations include Wells Fargo and Moody's Corp.

  • HSBC
  • Deutsche Bank
  • US
  • Bank of America
  • Royal Bank of Scotland
  •  
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