Deutsche Bank to pay $425m in US money laundering penalties

Deutsche Bank is to pay US authorities $425m (£340m) in a settlement over a Russian money laundering scheme.

The New York Department of Financial Services (DFS) said the bank had allowed traders to engage in "mirror trades" that improperly shifted around $10bn out of Russia between 2011 and 2015.

It added that several senior managers at the bank had missed opportunities to "detect, intercept and investigate" the scheme facilitated by its Moscow, New York and London branches.

In addition, the UK's Financial Conduct Authority will also fine Deutsche Bank around $200m for the suspicious trades, the Reuters agency said.

The scheme involved clients buying blue chip stocks at the bank's Moscow branch in rubles before related parties sold the same stock at the same price through the London branch.

The dubious trades were routinely cleared by Deutsche Bank's New York operations.

"This Russian mirror-trading scheme occurred while the bank was on clear notice of serious and widespread compliance issues dating back a decade," DFS superintendent Maria Vullo said in a statement.

"The offsetting trades here lacked economic purpose and could have been used to facilitate money laundering or enable other illicit conduct, and today's action sends a clear message that DFS will not tolerate such conduct.

"DFS is pleased to work with the Financial Conduct Authority on this matter."

Deutsche Bank said the settlement amount would come out of a pool it had set aside to pay fines and added that it would cooperate with regulators and law enforcement officials.

In addition to paying the fines, the lender is also required to set up an independent monitor to review its compliance measures.

The penalty comes weeks after Deutsche Bank agreed to a $7.2bn payment to US authorities over its sale of residential mortgage-backed securities in the lead up to the 2008 financial crisis.

The bank is due to release its latest quarterly financial results on 2 February.