The Financial Industry Regulatory Authority has fined Deutsche Bank AG $7.5 million for negligently misrepresenting delinquency data in connection with the issuance of subprime securities.
Finra found the German bank allegedly misrepresented and underreported the percentages of mortgages that were delinquent in the prospectus supplements of six subprime residential mortgages backed by securities the bank issued in 2006.
Deutsche Bank also failed to correct errors by a third-party vendor and servicers, which underreported historical rates of the mortgages, in connection with its offer and sale of 16 additional subprime mortgage-backed securities in 2007.
Further, Finra said Deutsche Bank failed to establish a system to supervise its reporting of historical delinquency information.
In settling the matter, Deutsche Bank neither admitted nor denied the charges, but consented to the entry of Finra's findings.
"We have cooperated with Finra throughout its investigation, and we are pleased to have resolved this matter," spokeswoman Renee Calabro said.
Finra is the largest independent regulator of securities firms doing business in the U.S.
