Deutsche Bank to pay $150mn penalty over Jeffrey Epstein, other compliance failures

NEW YORK: Deutsche Bank AG has agreed to pay $150 million in penalties to settle charges by a New York state regulator that the bank had "significant" compliance failures in its relationships with the late financier Jeffrey Epstein, Danske Bank Estonia and FBME Bank.

The New York State Department of Financial Services said on Tuesday that the agreement marks the first regulatory enforcement action against a financial institution for dealings with Epstein, the registered sex offender who committed suicide last August.

"For years, Mr. Epstein's criminal, abusive behavior was widely known, yet big institutions continued to excuse that history and lend their credibility or services for financial gain," New York Governor Andrew Cuomo said in a statement.

New York said Deutsche Bank failed to properly monitor Epstein's transactions despite "ample" publicly available information about his sexual misconduct.

It said this led to the bank processing hundreds of transactions for Epstein that should have prompted more scrutiny, including payments to victims, alleged accomplices, and law firms representing Epstein and the accomplices.

In the cases of Danske Estonia, which is embroiled in a money laundering scandal, and FBME, New York said Deutsche Bank failed to properly monitor their correspondent and dollar clearing businesses.

Deutsche Bank Chief Executive Christian Sewing told staff in an internal memo on Tuesday that it was a "critical mistake" to take Epstein on as a client in 2013. The bank also acknowledged deficiencies in its monitoring of Danske Estonia and FBME.

"We all have to help ensure that this kind of thing does not happen again," Sewing said.