Deutsche Bank, already under a deferred prosecution agreement for involvement in overseas corruption and market manipulation, just got a warning from the DOJ that it may have violated its deferred prosecution agreement in that matter. In January 2021, Deutsche paid a $130 million fine and agreed to a DPA for three years to settle up with the U.S. Then in August 2021, the head of the bank’s sustainability investment area expressed concerns to two executives that Deutsche had “overstated” its use of sustainable investing criteria to investors. She was fired and Deutsche did not disclose to the DOJ that it had received the complaint or that the complainant had been sacked. The Wall Street Journal then caught on, saw the e-mails, and wrote about the story in August 2021. The DOJ officials did a double-take, investigated, and warned the bank that its DPA is in jeopardy.
Deutsche Bank is the bank that can’t shoot straight — literally and figuratively — when it comes to compliance with the law. Despite ethics pledges and promises to toe the line, it just keeps dipping those toes into murky and sometimes black waters, especially in the underworld of international corruption. It is the DOJ’s call on whether to just go ahead with the original prosecution.
The key to successful completion of a DPA is to stay out of trouble for the negotiated period (three years in this case). With Deutsche Bank and its history, the DOJ should have known that’s just not possible. And when you can’t stay out of trouble the next best thing is to ‘fess up to the DOJ. Apparently, that too is a hurdle too tall for Deutsche Bank. The Barometer once warned a board of directors that their company was going to get a DPA from the Justice Department for the stunts they had just pulled. One director chirped, “But doesn’t everybody get a DPA these days?” Actually, the answer was, “No, no they don’t.” Most companies think that multi-million and multi=billion-dollar fines are not good for business and would prefer running their companies without an onsite federal monitor poking around and probing every nook and cranny. Still some companies suffer from the Deutsche Syndrome, which is so Alfred E. Newmany — “What? Me Worry?”.