Deutsche Bank's offices in Frankfurt are being searched by law enforcement authorities over reports about potential money laundering that were filed by the lender.
Police were at the bank’s headquarters Friday following a decision by a Frankfurt court. Officials from the prosecutor's office, the regulator BaFin and Germany’s BKA federal police are involved, according to a spokeswoman for the prosecutors.
Authorities are conducting the search to find out whether the bank was late filing a suspicious activity report in a case several years ago, according to a person familiar with the matter who asked for anonymity discussing internal information.
“This is an investigative measure by the Frankfurt public prosecutor’s office in connection with suspicious activity reports filed by the bank,” the lender said in a statement. “Deutsche Bank is fully cooperating with the authorities.”
Shares of the lender fell as much as 3.8% as the search may add to a list of legal and regulatory issues hanging over CEO Christian Sewing just as he emerges from a successful restructuring. The U.S. recently extended a monitorship after finding Deutsche Bank breached a deferred prosecution agreement after it was slow in reporting allegations by a whistleblower.
While the police presence this time was much smaller than in 2018, when video footage of some 170 law enforcement officials descending on the bank spooked investors, Deutsche Bank has a history of prosecutor searches.
In the 2018 case, when the bank was raided in connection with suspected money laundering tied to its private wealth business, it was ultimately ordered to pay 15 million euros ($16 million) for failing to flag suspicious transactions and lacking oversight.
In 2019, prosecutors used a search warrant to investigate money laundering tied to the lender’s relationship with Danske Bank A/S. In that case, Frankfurt prosecutors closed the case because they didn’t find sufficient evidence, but fined Deutsche Bank 13.5 million euros for not submitting suspicious activity reports in a timely fashion. The bank said in its 2021 annual report that it has received requests for information from authorities on its correspondent banking ties to Danske Bank.
Overall, legal cost have come down as Deutsche Bank dealt with the bulk of its lawsuits and regulatory probes after the financial crisis and Sewing made improving relations with regulators a priority. Still, the CEO hasn’t been able to draw a line under the legal woes completely.
Recent challenges include an internal probe into staff’s widespread use of private communication channels, a lawsuit alleging mis-selling of foreign-exchange derivatives, and criticism from U.S. and German regulators of the bank’s deficient controls.
A BaFin spokesman declined to comment on the search while the BKA referred requests for comment to the prosecutors office.
— With assistance from William Wilkes.
