Judge Orders Deutsche Bank Subsidiary to Pay $150Mfor Libor Rigging
A federal judge is ordering Deutsche Bank Group Services, a subsidiary of Deutsche Bank (DB), to pay $150M for its involvement in an interest rate manipulation scam. The London unit pleaded guilty last year to rigging the London Interbank Offered Rate benchmark.
The fine comes two years after Deutsche Bank settled Libor rigging allegations with US and British regulators for $2.5B. According to prosecutors, derivatives traders at the German bank and at other banks colluded together to manipulate LIBOR rates to preference their trading positions.
Libor rigging allegations are not the only claims that Deutsche Bank has been contending with. Recently, the German Bank reached a $7.2B settlement with the US DOJ over its part in the 2008 global financial crisis. Meantime, NY and British officials ordered Deutsche Bank to pay $630M in fines because of alleged money laundering that occurred in Russia.
Broker Implicated in “Pay-For-Play” Scam is Barred by FINRA
The Financial Industry Regulatory Authority is barring Deborah D. Kelley following criminal charges that she was allegedly part of a “pay-for-play” scam involving the New York State Common Retirement Fund. Kelly, a broker, was arrested last year and charged with securities fraud, conspiracy to commit securities fraud, conspiracy to obstruct justice, and wire fraud. At the time of her arrest she worked for Seaport Global Securities.
According to the charges, Kelley and broker Gregg Schonhorn paid N.Y. State Common Retirement Fund fixed-income director Navnoor Kang over $100K in bribes, including drugs, hookers, tickets to events, nightclub bottle service, money for strippers, and other expensive items. In return, Kang allegedly sent fixed-income business from the pension fund their way. Kang also was arrested in December.
The US Attorney’s Office for the Southern District of New York said that Kang directed over $2B in business to the brokerage firm where Kelley worked. Meantime, Kelley and her employers made commissions in the millions of dollars from the pension fund.
Kelly was registered with Stifel, Nicolaus & Co. Inc. (SF) in 2015. Previous to that she was with Sterne, Agee & Leach Inc. Stifel fired her for violating firm policies, including gifting or providing entertainment to a public pension fund portfolio manager and misrepresenting the expenses she turned in.
The alleged pay-for-play scam is said to have taken place from 1/2014 through 2/2016.
Hedge Fund Executive Who Invested in Madoff Ponzi Scam Commits Suicide
Charles Murphy, a former hedge fund executive, killed himself this week when he jumped 20 stories off a hotel in Manhattan. Investors sued Murphy after he invested approximately $7B with Bernard Madoff and the latter’s activities proved to be part of a massive multi-billion dollar Ponzi scam. The fraud was exposed in 2008. Murphy’s fund settled with investors. According to news reports, financial problems may have been a reason for his suicide.
He is not the only person to kill himself with connections to the Madoff Ponzi scam. Rene-Thierry Magon de la Villehuchet committed suicide in 2008 after losing more than $1.4B that he invested with Madoff. Also, one of Madoff’s sons killed himself two years after his arrest.
Deutsche Bank Unit Gets $150M Libor-Rigging Deal Approved, Law360, March 28, 2017
Finra bars broker charged in NY pension fund hookers, strippers and drug scandal, InvestmentNews, March 29, 2017
Hedge fund exec whose former firm was linked to Madoff jumps to his death, CNN, March 28, 2017
Deutsche Bank fined $630m over Russia money laundering claims, The Guardian, January 31, 2017