Дойче Банк О Форекс

A Deutsche Bank inquiry into the mis-selling of risky foreign exchange derivatives in Spain has found that staff acted disingenuously, exploited flaws in the bank’s controls and broke EU rules, according to people with knowledge of the report.

One of the people said employees acted in “bad faith” over years, pushing small-and-medium-sized Spanish companies to buy highly complex foreign exchange derivatives. The products, which were promoted as safe and cheap, were meant to hedge against foreign exchange risks. They generated huge profits for Deutsche but exposed clients to extensive risk and crippling losses in some cases.

A second person familiar with the probe described some of the Deutsche staff conduct as “very unfortunate”.

Fewer than 12 people were formally sanctioned by the bank over the misconduct, the people said.

The probe of the mis-selling – code-named “Project Teal” – was first reported by the Financial Times two years ago and is nearing its conclusion. The bank has paid tens of millions of euro in settlements to affected clients, the people said. It has also tightened internal controls and stopped offering some foreign exchange products to certain client groups.

The bank is still fighting a € million legal claim by one of Spain’s largest hotel groups in London’s high court over the trades, arguing this case was structurally different from others it has settled.

The misconduct, which involved a London desk of Deutsche’s investment bank, as well as Spanish operations at its international private unit, spanned several years until The probe, which was conducted by a large London-based law firm, was launched in the second half of after an internal whistleblower raised allegations, just after a managing director in charge of the structured products had left. – Copyright The Financial Times Limited

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The European Central Bank (ECB) and BaFin, the financial supervisor from Germany, have both expressed their dissatisfaction over the actions of employees at Deutsche Bank, the country's largest lender, who mis-sold foreign exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial eunic-brussels.eully, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial eunic-brussels.eully, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term (FX) instruments to make large profits.

According to the Financial Times (FT) report, which quotes people familiar with the matter, ECB and BaFin said they are "not satisfied" with the 'Project Teal' probe regarding the internal review of the lender's misconduct.

The investigation that started almost three years ago, and is close to being summarized, found that Deutsche Bank employees used flawed elements of the internal control systems to sell highly-complex currency derivatives to small and medium-sized companies in Spain, in violation of EU law.

According to BaFin and the ECB, the action taken by the lender was too slow, and some shortcomings in the methodology of the internal investigation were noted as well. The bank allegedly inspected a limited number of transactions that were carried out. According to the regulators, a much broader sample of data would have been necessary to assess the situation better.

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According to people familiar with the matter, the problem did not affect only one office, which was the probe's focus in its initial phase, but also other desks. However, the bank did not officially detect that employees were exploiting the security holes in other divisions. In the end, 12 people were punished for violating regulations related to supervision, and some for using the flawed systems in bad faith.

According to the FT, negative feedback from regulators regarding Project Teal could end in fines. The new penalties have continued Deutsche Bank's bad streak seen in recent years.

Watch the recent FMLS22 panel titled: "Regulation Roundup: Everything You Need to Know for "

Christian Sewing Promised to Heal Deutsche Bank

Deutsche Bank had been involved in several high-profile financial scandals over the previous decade, including manipulating Libor rates, mis-selling securities, tax fraud, and money laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate eunic-brussels.eu laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate eunic-brussels.eu laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term for Russia's oligarchs.

When Christian Sewing was appointed as the new CEO in April , he promised to steer the bank away from similar controversies in the future. However, the events now under investigation by Project Teal took place prior to mid, which is a year after Sewing took over as head of the institution.

In addition, in , the US Department of Justice admonished the institution for breach of prior arrangements after it belatedly submitted a whistleblower complaint to its asset management unit. Meanwhile, November saw the escalation of a long-term dispute with the German regulator over improving the money laundering controls. Finally, BaFin imposed an administrative penalty of € million.

Big Banks Pay 'Big Bucks'

In the past decade, the world's largest banks, including Deutsche Bank, paid a total of $10 billion in financial penalties for manipulating forex rates. Although the market hasn't witnessed such a major scandal since then, Project Teal and similar investigations show that large financial penalties go hand in hand with the activities of large lenders.

According to the SteelEye report, in , the world's largest regulators imposed penalties of $7 billion on financial institutions.

Allianz Global Investors US LLC had to pay more than $1 billion in connection with an allegedly fraudulent scheme that concealed the risks of a complex options trading strategy called 'Strucuted Alpha'.

Meanwhile, in December , the UK-based Santander paid £ million for prolonged AML breaches. The UK unit of Santander failed to properly oversee and manage its AML systems for almost five years, from 31 December to 18 October These lapses impacted the oversight of more than , business customers.

Services

Deutsche Bank foreign exchange trading platform

dbFX was Deutsche Bank’s online margin foreign exchange trading platform and service for individual and institutional investors including financial institutions, hedge funds, corporations, asset managers, money managers, commodity trading advisors, broker-dealers, brokerage firms, high net worth individuals, and sophisticated and professional traders, which operated from ^[1][2][3]

In , Deutsche Bank, then the world’s largest provider of foreign exchange trading by global market share,^[4] became the first global bulge bracketinvestment bank to offer institutional foreign exchange trading through an online margin FX trading platform.^[5]

The state of the art dbFX platform^[1] was a new and innovative technology at the time, which marked a paradigm shift from over-the-phone trading, to instantaneous online trade execution, at a reduced cost and risk, thus creating a de facto new asset class, and opening up, disrupting, and democratizing access to the global FX market.^[5]

On June 1, , Euromoney, a leading institutional investor and international finance magazine, provided the context for the disruptive nature of Deutsche Bank’s dbFX platform.

“Deutsche Bank’s dbFX platform, formally announced on May 15, appears to herald a new phase. Deutsche’s move has got tongues wagging about which bank will be next. Gossip suggests it will be UBS. Direct access to the [FX] market has generally been over the phone.”^[5]

Three years later in , Citibank, currently the world's largest provider of foreign exchange,^[6] initiated a competitive response to Deutsche Bank's dbFX platform called CitiFX Pro,^[7][8] thus becoming the second multinational bulge bracket investment bank to launch an online institutional foreign exchange service on a margin foreign exchange technology platform.

History[edit]

Deutsche Bank was founded in as a specialist bank for foreign trade. In October , Deutsche Bank listed its stock on the New York Stock Exchange, the first NYSE listing after the September 11 attacks. From , Deutsche Bank expanded rapidly through acquisitions of Rued Blass & Cie private bank, German Norisbank, Berliner Bank, and Deutsche Postbank, and Russian investment bank United Financial Group, achieving a target return on equity of 25%, and becoming one of the world's nine largest bulge bracket investment banks, and the world's largest foreign exchange provider.^[4][9]

By mid , Deutsche Bank was in search of new and innovative ways to continue growing its global presence, and its market share of global foreign exchange trading, while meeting the increasing client demand for streamlined access to capital market products.^[10]

Launch[edit]

The idea for dbFX came from the executive management of one of Deutsche Bank's largest clients, FXCM, then the market leader in online margin FX trading, with a growing institutional footprint. A team led by Senior Managing Director Jayme Illien successfully proposed and structured a global strategic partnership with Deutsche Bank to establish and launch dbFX.^{[1][2][11][12][13]}

dbFX was initially launched with countries with Illien as the founding global head of dbFX. He hand-picked, trained, and led a global cross-functional team across sales, trading, risk management, research, compliance, operations, and technology to launch and expand dbFX into + countries, legal and regulatory jurisdictions, and nine languages.^[14]

dbFX offered the ability to trade on “one click” real time streaming executable quotes 24 hours a day at spreads as low as pips on 34 currency pairs directly from the interbank market, the largest and most active foreign exchange banks in the world.^[1][15]

Deutsche Bank was the counterparty to all trades. All client funds were held at Deutsche Bank AG and protected by the Deposit Protection Fund of the Association of German Banks.

From , dbFX became the fastest growing business within Deutsche Bank, and a major contributor to Deutsche Bank's reign as the world's largest provider of foreign exchange trading from ^[16][17]

Many of the original dbFX leadership and team are now CEOs, managing directors, global heads, and senior executive leaders at the world's leading fintech companies, hedge funds, FX desks, and global financial institutions.^[18][19]

Closure[edit]

Against the backdrop of the global financial crisis of , and the subsequent changing regulations of global financial markets, including the Dodd–Frank Wall Street Reform and Consumer Protection Act of , and the Basel III capital and liquidity standards, Deutsche Bank decided to discontinue dbFX, and a portion of dbFX business was acquired by Gain Capital, a leading global provider of online trading.^[20]

Deutsche Bank released a statement about dbFX:

“dbFX volumes grew every year since culminating with volumes 56% higher than dbFX has been a strongly performing business for Deutsche Bank but has reached a point where in order to reach its full potential it requires significant investment in specific resources which are not consistent with Deutsche Bank’s current strategic initiatives.”

Speculation about why Deutsche Bank sold dbFX to Gain Capital has ranged, and included new global markets and financial regulations, lower corporate risk tolerance considering the bank's losses and exposure to the housing credit bubble and subprime and CDO market, Deutsche Bank management changes in response to the global financial crisis, and issues regarding competitive threats to profitability with incumbent Deutsche Bank businesses.^[21]

Services[edit]

dbFX clients received access to award-winning multi asset Deutsche Bank research including in depth economic resources, special forex reports, and daily reports covering economic developments, real time FX news and market commentary. dbFX clients could also trade directly from charts, connect to dbfx by API, implement algorithmic, black box, automatic, and artificial intelligence based trading programs, invest with Deutsche Bank FX select portfolio of money managers, as well as access trading in multiple asset classes including equities, equity derivatives, and commodities trading.^[22]

Trading platform[edit]

The dbFX trading platform was provided under a global strategic partnership from FXCM and was available in nine languages including English, Chinese, Arabic, German, Spanish, French and Russian. Features included integrated charts, hedging with no FIFO restrictions, different order types, real-time account summary and hour reporting.^[1]

References[edit]

External links[edit]

dbFX - Forex Broker Details

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