Deutsche Bank pay­ing $55m set­tle­ment on in­cor­rect re­ports

China Daily (Canada) - - FRONT PAGE - By AS­SO­CI­ATED PRESS

Ger­many’s Deutsche Bank AG has agreed to pay $55 mil­lion to set­tle civil charges of fil­ing in­cor­rect re­ports dur­ing the fi­nan­cial cri­sis that down­played risks of huge losses.

The US Se­cu­ri­ties and Ex­change Com­mis­sion an­nounced the set­tle­ment on Tues­day with the big Ger­man bank, which is a prom­i­nent in­sti­tu­tion on Wall Street. Deutsche Bank nei­ther ad­mit­ted nor de­nied the al­le­ga­tions but did agree to re­frain from fu­ture vi­o­la­tions of the se­cu­ri­ties laws.

The SEC said that in two quar­terly re­ports in 2008 and 2009, Deutsche Bank in­flated the value of its trans­ac­tions de­signed to hedge against losses on se­cu­ri­ties in the credit mar­kets, which were tur­bu­lent at the time. That cre­ated a “gap risk” worth bil­lions of dol­lars that wasn’t prop­erly taken into ac­count in the bank’s re­ports, the agency said.

Deutsche Bank said in a state­ment that it has pre­vi­ously set aside re­serves to pay the $55 mil­lion penalty, and the pay­ment will have no im­pact on its pre­vi­ous fi­nan­cial re­ports. The bank said it has not had any losses re­lated to the “gap risk” be­cause it never ma­te­ri­al­ized.

Deutsche Bank also said it has greatly re­duced its po­si­tions in the trans­ac­tions in ques­tion in re­cent years.

“Since the fi­nan­cial cri­sis, the bank has en­hanced poli­cies, pro­ce­dures and in­ter­nal con­trols” for as­sign­ing val­ues to as­sets that aren’t eas­ily sold such as those in ques­tion, the state­ment said.

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