Deutsche Bank Slapped With $14 Billion Fine By DOJ Over Mortgage Probe

Tyler Durden's picture

Blowback? Just a few weeks after the EU slapped Apple with a $14 billion bill for "back taxes," the U.S. has apparently responded with a $14 billion fine of their own to Deutsche Bank to settle an outstanding probe into the company's trading of mortgage-backed securities during the financial crisis

Shareholders are not happy...


According to the Wall Street Journal, the proposed settlement would be largest fine paid by any of the banks related to similar charges.  Unfortunately for DB, the fine is roughly equal to it's entire market cap and the stock is plunging nearly 8% in after hours trading.

The U.S. Justice Department proposed that Deutsche Bank AG pay $14 billion to settle a set of high-profile mortgage-securities probes stemming from the financial crisis, according to people familiar with the matter, a number that would rank among the largest of what other banks have paid to resolve similar claims and is well above what investors have been expecting.


The figure is described by people close to the negotiations between Deutsche Bank and the government as preliminary, and they said it came up in discussions between the bank and government lawyers in recent days. It hasn’t been previously disclosed. Deutsche Bank is expected to push back strongly against it, the people said, and it is far from clear what the final outcome will be.


It is also unclear how much of that amount is proposed to be paid in cash, and how much could be in consumer relief, as past deals have been structured.

A DB spokesman confirmed back in July that negotiations had been initiated with the DOJ though no estimates had been provided on the size of any potential settlement before today.  That said, the Wall Street Journal notes that DB's attorneys had privately suggested that a $2 - $3 billion settlement with the DOJ was probably in the ballpark.  Meanwhile, wall street analysts had estimated settlements in the $2-$5 billion range.  Any fines paid pursuant to current negotiations would be in addition to the $1.9 billion already paid in 2013 to settle other U.S. claims related to mortgage-backed securities.

Per the table below, as of June 30, DB had reserved a total of €5.5 billion for civil litigation and regulatory penalties on it's balance sheet.



The size of the proposed settlement is also bad news for other European banks that remain under investigation by the DOJ including Barclays, Credit Suisse, UBS and RBS.  Lawyers working with other banks have indicated that DB's settlement would likely set the precedent for what other Euro banks might be expected to pay. 

Just when you thought DB was safe...

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
junction's picture

Don't settle, DB, fight it out!

First get rid of Merkel, then sue Apple directly for ripping off your tax authorities.  You don't settle with blackmailers. 

knukles's picture

Tit for Tat

Y'all remember that the DOJ said there was plenty they could do?

Frito's picture

Tit for Tat

Butter for Fat

You kick my dog,

I'll kick your cat

fx's picture

nobody messes with uncle sam. he will teach them. us banks got bailed out and subsidised for their shameless participation in the mbs scam. foreign banks will pay have to pay for it, though, and dearly. in totally unrelated news, uncle sam's pushing for "free and fair trade" and whines about others treating Us corporations unfairly. wtf?

Boris Alatovkrap's picture

Maybe is seem expensive, but hey, someone is must pay for all that socialism in EU as they run out of others' money.

CheapBastard's picture

What is the penalty for the millions of subprime USA banks created?

Manthong's picture

‘Sno big deal, Douche Bank will just offload more toxic paper to the Fed and ECB.

NotApplicable's picture

Which will book it as "growth."

American Psycho's picture

Good news for the out of the money puts. 

Arnold's picture

Can we work out a payment schedule?

We're short on cash right now.



beemasters's picture

On the optimistic side, DB is now surviving longer than least by a month according to the above chart.

eforce's picture

Eurotanic on the way to the bottom... "DeustcheBerg right ahead!"

Backin2006's picture

What are you all panicking about? I'm sure that all those entreprenerial types Merkel's been bringing in will quickly fill the gap left by DB by starting their own financial institutions. [Bats eyelids rapidly.]

Lets Buy The Dip's picture

only thing that seems expensive is the market here. 

And the stock stock market has been crashing the last few days, cause big money is selling. Look at this SHOCKING article with proof!==>

socializism is rife in the US, infact they wrote the book. Rob from the POOR to keep paying the RICH, right...isnt that how it works!!! What a bunch of degenerate bastards. 

ebworthen's picture

No one in jail.

If you could make hundreds of Billions breaking the law - and pay a $14 Billion fine - that would be like the Maifa's commission, no?

NotApplicable's picture

Well, government is just the most organized form of crime. Regardless of the label for those who rule, the owners of the rules always demand a cut of any money flow. Meanwhile, their protected associates celebrate their ever increasing market share from running the same scam with impunity.

Monopolies cannot exist without government, with illegal ones paying the best dividends.

piliage's picture

Well, I look forward to the DOJ also cracking down hard on Wells Fargo for screwing over millions of Americans with insane levels of fraud endorsed at the highest levels of the company...


Arnold's picture

John Stumph is a person of color, isn't he?

espirit's picture

DB == Doosh Bagholder.

Pay up,

Regards - DOJ.

SWCroaker's picture

So, can DB tell the DOJ they'll pay, but it will take them 7 or so years to do so due to logistics...?

Beowulf55's picture

Interesting to note that the only winner is the governments...........guess they need money for their retirement benefits.......



FGH's picture

But...but...but, they said Trump would be bad for world trade.

AGuy's picture

"Tit for Tat"

Not exactly since if DB goes under, it going to have huge ramifications for the global economy, including the USA. Fining DB is like pointing a gun at ones own head and playing russian roulette!

if DoJ wanted to send a message, it would been better to target Siemens or some other company that isn't going to cause a global ecomonic meltdown.


Frito's picture

All going exactly according to plan. You're assuming a global meltdown is not something they want to happen.

Playin' Russian Roulette with a Glock.

AGuy's picture

"You're assuming a global meltdown is not something they want to happen."

if they wanted a global meltdown then all they need to do is stop QE and manipulating the market. Obviously they don't want it to meltdown.


Implied Violins's picture

No, they needed that QE and market manipulation to buy as many assets as possible and bankrupt as many people as possible before they pull the plug, on THEIR terms, and on THEIR schedule. And that time is right...about...NOW.

AGuy's picture

"No, they needed that QE and market manipulation to buy as many assets as possible and bankrupt as many people as possible before they pull the plug"

I don't think that's the case

1. I think they are more worried about blowback: riots, revolutions, and good ole public lynchings of public officials

2. it would be better to let the world fall into a deep depression. then they can pick up assets for pennies on the dollar, and force the mass in to full submission (but I don't think that would work. See Point #1)

3. They have no schedule. They been pushing for One World Gov't for more than a decade. A depression would permit them to tighten their grip as more people become dependent on the gov't (see early 20th Centuries: Rise of Communism, strong central gov'ts).


Implied Violins's picture

Well, if I'm right we will know it in a few months at most. And believe me, I pray I'm wrong.

Frito's picture

I'm not sure they're overly worried about blowback. The angry masses will be pointed at each other. The true people (if you can call them that) behind this will remain largely hidden.

They want, desperately, and need a dramatic reduction in population. A deep depression will not provide for this (quickly enough). War, and pestilence (man made or otherwise) will.

They have been pushing for a One World Government for probably more than a century. I feel that they would probably like to take it a little slower, but circumstances have conspired against this (the internet has allowed much more of their plans to be discovered than they had hoped for). They may be getting to a point where their hand is forced, ready or not.


Like Implied Violins, I hope that I'm wrong about this. Maybe you're right, but that seems little consolation.

Cynicles's picture

huh, was it the people got something or the Gov got something out of the "deal"?

zeronetwork's picture

These people has made american  law a fucken joke for the world.

BlindMonkey's picture

Time for the go to batman quotes:



"Some men just want to watch the world burn."



brockhardman's picture

You are asking for that kind of money from an insolvent bank? Is this the trigger?

knukles's picture

Hah ha ha ha ha hahah
I hadn't thought of it that way.
Far Out.  A Real FU to Deutschland.
Now you fuckers bail her out.

WTFUD's picture

It's all BS, The Fed bailed out the EU Banking System of Incest to the toon of $400 Billion.


Implied Violins's picture

...but they won't this time - because Shemitah.

It's ON beeyatchez. Better stock up on popcorn, 'cuz we are about to see quite the show...

espirit's picture

Pay up, or we keep your Gold you asked for a few years back.

(and.. it's gone)

johngaltfla's picture

Tick, Tick, BOOM.

(Love that song)

Offthebeach's picture

There is no law anywhere.

As BJ Clinton said, " It all depends on what "law" is law" (+/-)

BandGap's picture

You had me at Deutsche Bank Slapped.



GRDguy's picture

Nah, just offseting penalties. Repeat the play. It's all that stupid anyway.

Bunga Bunga's picture

+ get always out of jail for free.

max2205's picture

DoJ new Pokeyoureyeoutman 

Katos's picture

The psychopaths are turning in one another!