• Pin It
  • Pin It

Deutsche Bank rejects U.S. $14bn claim to settle probe

Sep 16, 2016, 1:16 AM EDT
(Source: Metropolico.org/flickr)
(Source: Metropolico.org/flickr)

The U.S. Department of Justice is demanding $14 billion from Deutsche Bank as settlement amount for an investigation into the sale of mortgage-based securities, the German financial lender said on Thursday. The bank said that it has no intentions to settle the potential claims at the stated figure and will negotiate for an outcome similar to those of other banks that have paid materially low amounts as fine.

Such a hefty fine would be a big blow to “Deutsche’s fragile finances” and might further shake investor confidence in the bank, writes The Guardian. The bank’s U.S.-listed shares slumped by eight percent in after-hours trading on Thursday.

The Department of Justice has been tough in dealing with banks, which mis-sold mortgage-based securities and contributed significantly in triggering the 2008 financial crisis, reports the BBC. Morgan Stanley, Credit Suisse, H.S.B.C., U.B.S. and Goldman Sachs have all settled cases related to the repackaging of unsafe loans as safe investments and then selling the risk on to others.

Deutsche Bank, which was once a dominant player on Wall Street, has faced a string of lawsuits tracing back to the boom years just ahead of the crash and has paid litigation bills worth €12bn in the last four years. 

YOU MIGHT ALSO LIKE