http://www.reuters.com/article/us-usa-stocks-weekahead-idUSKCN1202O8
Deutsche Bank will likely cast a pall over equity markets next week as the largest German lender navigates a possible multi-billion dollar settlement with the U.S. Department of Justice [DOJ] over the sale of mortgage-backed bonds. Deutsche shares traded in the United States hit a record low on Thursday, falling as much as 24 percent since the DOJ asked the bank to pay $14 billion to settle charges related to its sale of toxic mortgage bonds before the financial crisis.
But the stock had its best day in five years Friday, on record volume, after news agency AFP reported that Deutsche was nearing a much-lower $5.4 billion settlement with the DOJ. Analysts at Morgan Stanley estimated Deutsche could pay about $6 billion to settle with the DOJ.
Related Stories
Deutsche Bank has nominated its chairman for a second term after an internal probe cleared him of accusations that he was partly to blame for the bank's poor cooperation with authorities in a probe into rate-rigging, a source close to the bank said. Paul Achleitner was nominated at a meeting of the lender's supervisory board in late October, the source said on Sunday. Shareholders will vote on the extension of his term at the annual meeting next spring.
Several shareholders said on Friday that a renewal of Achleitner's contract was imperiled by Deutsche's poor earnings and faltering share price. "The bank needs stability and continuity," said the source about his nomination. Last year, Germany's largest lender agreed to settle a case over the alleged manipulation of interbank rates such as Libor for a record $2.5 billion with U.S. and British authorities, which had accused the bank of obstructing their investigation.
[...] A motion calling for an additional external investigation was voted down at the annual general meeting in May. Any evidence of wrongdoing would have made it an uphill battle for Achleitner to secure a second term as chairman. Deutsche is still investigating some former top executives, the paper said.
What was the Libor rate-rigging scandal?
The Libor scandal was a series of fraudulent actions connected to the Libor (London Interbank Offered Rate) and also the resulting investigation and reaction. The Libor is an average interest rate calculated through submissions of interest rates by major banks across the world. The scandal arose when it was discovered that banks were falsely inflating or deflating their rates so as to profit from trades, or to give the impression that they were more creditworthy than they were. Libor underpins approximately $350 trillion in derivatives. It is currently administered by NYSE Euronext, which took over running the Libor in January 2014.
Related: Three Convicted in Libor Rigging Trial
Deutsche Bank Nearing Multi-Billion Dollar Settlement with U.S. Dept. of Justice
(Score: 4, Insightful) by mendax on Sunday October 02 2016, @11:36PM
The bank needs to be soaked, executives responsible for the malfeasance need to go to jail, and if the settlement puts the bank into financial insolvency, so be it. The stockholders may be wiped out by it but that is the risk one takes in investing in a bank that does such dastardly deeds. But what I am really interested in seeing is executives and managers going to jail. Filling federal prisons with bank officials will do much to stop this kind of shit from happening again.
It's really quite a simple choice: Life, Death, or Los Angeles.
(Score: 3, Insightful) by Arik on Monday October 03 2016, @01:11AM
Steal $20bn by creative accounting - spend half of it on bribes and enjoy the rest at your leisure.
If voting could change the system it would be illegal.
If laughter is the best medicine, who are the best doctors?
(Score: 0) by Anonymous Coward on Monday October 03 2016, @12:21AM
It's not just a possible fine, DB has other issues. " It still has €1.6 trillion ($1.79 trillion; £1.38 trillion) of loans outstanding. Only a small percentage of them need to go bad to wipe out the €60bn it has in capital." from http://www.bbc.com/news/business-37520608 [bbc.com]
(While looking for the above, found a newer article that links to it and 3 more:) Other (European) business try to defend it, but it is fucked, it is fucked (and maybe the companies too... or the world, if it becomes "The return of 2008"). http://www.bbc.com/news/business-37536833 [bbc.com]
Yay! Not.
(Score: 0) by Anonymous Coward on Monday October 03 2016, @12:00PM
It still has €1.6 trillion ($1.79 trillion; £1.38 trillion) of loans outstanding. Only a small percentage of them need to go bad to wipe out the €60bn it has in capital
So, what you are saying exactly? That all banks are fucked because they gave out loans. That's their business!!!
http://investor.bankofamerica.com/phoenix.zhtml?c=71595&p=quarterlyearnings [bankofamerica.com]
$903 BILLION in outstanding loans, not paid on time (note 4)
with $40 billion not paid on time
$160 billion in cash
$2200 BILLION IN TOTAL ASSETS INCLUDING CASH!
https://www.db.com/ir/en/quarterly-results.htm [db.com]
428 BILLION in loans
60 BILLION in cash
1800 BILLION IN TOTAL ASSETS INCLUDING CASH!
So Simon Jack can't read financial statements and you are just parroting his misinformation.
(Score: 2) by frojack on Monday October 03 2016, @12:36AM
Are these German mortgages and German bonds? Or they repackaging toxic American Loans left over from the forced lending to unqualified borrowers that cause the trouble in US banks?
TFS and TFA are pretty unclear as to why the DOJ is even involved.
No, you are mistaken. I've always had this sig.
(Score: 2) by sjames on Monday October 03 2016, @02:33AM
Those loans were NOT forced. The lenders couldn't get enough of them, they were like stoners in the junk food isle.
(Score: 0) by Anonymous Coward on Monday October 03 2016, @12:50AM
Go ahead and buy my shorts on the open Monday morning lel
(Score: 3, Interesting) by gawdonblue on Monday October 03 2016, @03:41AM
Just wondering, cause it seems like only foreign companies get these massive fines.
(Score: 2, Interesting) by khallow on Monday October 03 2016, @04:34AM
My view is that revelations of such widespread criminal activity are actually the late stages of a market bubble. A huge part of the market would have ignored risk for some time by this point, including eventually criminal activity by a opportunistic ecosystem springing up to take advantage of the situation. These stories both display that risk ignorance (after all, what's the ROI on an anti-fraud division, right? We're too busy making bank to care) and help stir up the eventual attitude reversal that marks the crash.
If you're in the habit of leaving steaks unattended on the table and letting Fido yank them off whenever, then don't be surprised when Fido disappears a lot of steaks. And certainly don't blame Fido when your source of steaks suddenly dries up or you have to clean up 50 half chewed steaks stashed in the hallway closet.
(Score: 2) by mcgrew on Monday October 03 2016, @11:43PM
It's Douche Bank.
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