Thursday, April 23, 2015

The joys of stealing big


If you put no limit on how much you can and will steal, the authorities will have a hard time grasping the extent of your grasping and any penalty when you are caught will in no way match the size of your gain. Deutsche Bank is the latest to benefit from this anomaly as it will pay a piddly $2.5B in fines for manipulating rates on the shit it sells.
Deutsche Bank will pay a $2.5 billion penalty to United States and British authorities to settle accusations that it helped manipulate the benchmarks used to set interest rates on trillions of dollars in mortgages, student loans, credit cards and other debt, officials said on Thursday.

The penalty is by far the largest in a yearslong investigation into whether large banks conspired to set the price of debt in ways that would be profitable for them. Until Thursday, the largest fine was the $1.5 billion the Swiss bank UBS agreed to pay in 2012 — one of several global banks linked to the gaming of interest rates.

The size of the fine reflected Deutsche Bank’s large share of the market for derivatives and other financial instruments tied to the rates. The authorities denounced the bank, Germany’s biggest financial institution and one of the last European banks with a major Wall Street presence, for what they said was lax oversight of traders and employees involved in setting rates, as well as a failure to respond to warning signs of misconduct. They also said the bank also misled investigators and dragged its feet in providing information.

Excerpts from electronic messages showed traders from Deutsche Bank and other investment banks addressing each other as “dude,” “mate” and “amigo” as they colluded to help their own trading positions at the expense of millions of borrowers.

The fixing of interest rates by Deutsche Bank employees in London, Frankfurt, New York and Tokyo from 2005 to 2011 was deliberate, and the employees were aware that it was wrong, the authorities said.

“One division at Deutsche Bank had a culture of generating profits without proper regard to the integrity of the market,” Georgina Philippou, acting director of enforcement and market oversight at the Financial Conduct Authority in Britain, said in a statement. “This wasn’t limited to a few individuals but, on certain desks, it appeared deeply ingrained.”

As part of the settlement, one of Deutsche Bank’s British subsidiaries will plead guilty to fraud, and the company will install an independent monitor who will ensure that the bank complies with New York laws.

The authorities also ordered the bank to fire seven managers suspected of involvement in the wrongdoing, all but one of whom are in London. They were among 29 employees believed to have taken part, most of whom have already left the bank.
Actually getting an admission of guilt must be the Brits fault, the US never seems to be able to accomplish that. The same with the firing of seven small to medium sized fish.

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