DOJ Launches Probe Of Individuals Who Worked In Deutsche Bank's Mortgage Unit

Tyler Durden's picture

Deutsche Bank employees who were engaged in the actual trades that ended up costing the bank a $7.2 billion settlement at the end of 2016, and who were hoping to quietly get away without criminal or civil charges, are set for disappointment because as IFR reports the DOJ is probing for potential fraud by individuals who worked in Deutsche Bank's mortgage unit in the run-up to the financial crisis. 

According to IFR's sources, "the investigation of former Deutsche staffers is a push to hold individuals accountable for their role in the housing crisis." The probe follows Deutsche's multi-billion settlement in December with the DOJ over toxic residential mortgage securities sold between 2006 and 2007. Observers were surprised when no individuals who worked at Deutsche were named in the settlement, leaving shareholders footing the bill.

Now, the DOJ's fresh probe leaves open the possibility of pursuing individuals who had worked at Deutsche. Confirming that there has been no individuals have been exempt from personal liability, in the January 17 press release outlining the facts, finalization and terms of the settlement, the DOJ said that the settlement with Deutsche does not release any individuals from potential criminal or civil liability.

Speaking of which, has anyone seen Greg Lippman these days?

* * *

Separately, and presaging what will soon take place in Deutsche Bank, Reuters writes that the DOJ in December named two former Barclays RMBS staffers in a civil suit it filed against Barclays and some of its US affiliates. The complaint against Barclays alleged that the bank and its staffers fraudulently sold tens of billions of dollars of RMBS, and repeatedly misled investors about the quality of the mortgages backing those deals. The individuals named in the Barclays complaint, Paul Menefee and John Carroll, have obtained their own legal counsel, a Barclays spokesperson said. Menefee was Barclays' head banker on its subprime RMBS securitizations, and Carroll was Barclays' head trader for subprime loan acquisitions.

"It is surprising and extremely disappointing that the government decided to file this highly unusual lawsuit. John Carroll intends to challenge these ill-conceived and baseless allegations, and expects to be fully vindicated," Crowell & Moring partner Glen McGorty, who is representing Carroll, said in an emailed statement to IFR. A response to the complaint against Carroll has not yet been filed, McGorty said.


Lawyers for Menefee did not immediately respond to requests for comment. No filing has been made on behalf of Menefee, according to a search of the federal court docket. Barclays previously said it rejects the claims made in the complaint.

Reuters adds that "Barclays considers that the claims made in the complaint are disconnected from the facts. We have an obligation to our shareholders, customers, clients, and employees to defend ourselves against unreasonable allegations and demands. Barclays will vigorously defend the complaint and seek its dismissal at the earliest opportunity."

We look forward to the Deustche Bank - and of course Spiegel - outrage, when a similar judgment is levied against the largest German bank.

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LawsofPhysics's picture

LMFAO!!!!!   The department of JUST-US at "work"....

Look motherfuckers, if everything is "awesome" in the eCONomy then restore Glass-Steagall and REMOVE THE TAXPAYER BACKSTOP on the banking and finance sector!!!!!!!!!!

The only way to modify human behavior is to allow bad managment/ownership to FAIL and suffer REAL CONSEQUENCES!!!

CheapBastard's picture

But Holder and Lowrenta said they're too big to jail?!

Lorenta said 'climate change deniers' and dem 'soccer officials' be worser. Makes me wonder how much the Banker deposited into the secret Holder-Lowrenta Swiss bank accounts.

Or did the Clinoton Krime Foundation buy them vacation houses like they did for Bernie and Jill Stein?

barndoor's picture

But the big question is - how much money has Trump borrowed from this particular bank?

InjectTheVenom's picture

hey DOJ (and POTUS too)...

wanna REALLY Make America Great Again ?

wanna REALLY Drain the Swamp ?

how about investigating Soros & crew.


Thank You.

signed,  The World.

Arnold's picture

Statute of limitations?

They may have abetted a killing......

Boris Badenov's picture

Great question, I thought the SoL clock had ran out...

yet they are starting with a forein bank?

Arnold's picture

2. Securities and commodities fraud—6 years

12. Bank fraud—10 years


My extensive law library says case dismissed.

ChanceIs's picture

I was always thinking that that avenue was open to get around the SOL.

"W" and Obama were such wimps when it came to prosecuting the banks.

Hey!!!!  I want my due process and wouldn't welcome knocks on the door in the middle of the know...rouse Jews.  But when so much damage has been done - thousands driven to suicide over financial loss - I think that woater boarding a few banking program trainesss to start rolling and prosecuting up the management ladder is quite justified.  Besides.  Even if the banking frosh were not yet capable of having executed serious fraud personally, they all do cocaine to beat the band.  And they have the fraud execution and cover-up play books in their freshman orientation materials.

Looney's picture

Lorenta said 'climate change deniers' and dem 'soccer officials' be worser

Screw them Tree Huggers and their phony Global Warming!

While mumbling about the Environment, none of them have any qualms about using toilet paper. BTW, it takes one full-grown tree to make 10 rolls of TP.

I’ve never met a Tree Hugger openly admitting to wiping his/her ass with a brick or bare hands. Now… have you?  ;-)


peddling-fiction's picture

Maybe the real reason for this agressiveness towards Deutsche Bank (DB) is the condemnation of Germany regarding an Israeli Land-grab Law that is also retroactive.


DB Managing Director was also arrested in Israel.


Tit for tat?

business as stusual's picture

This is Adapt 2030, their information is excellent, you might want to check out what is really coming at us.


peddling-fiction's picture

Maunder minimum again.

Get ready to ice skate on the Thames.

Jayda1850's picture

Good luck with that. The only way DB goes down under Trump is if GS is waiting in the wings to buy up in a firesale.

Relentless's picture

[cue the music]

But seriously, wake me up when they start to investigate a US bank

chunga's picture

There was a fake investigation into Wells Fargo, the national bank that criminally created 2 *million* fraudulent accounts.

The result was a settlement with WF admitting no wrong doing for what was called an "aggressive sales tactic".

Giant Meteor's picture

I agree, all correct. Non prosecutorial agreements. Fines, no admissions of guilt. An apparent trend, HEAVILY put into effect circa, AFTER early 2000's with the unraveling of ENRON, Worldcom I believe, and many others. The PTB  now understanding, they cannot possibly allow "systemic" albeit corrupt, institutions to FAIL anymore. Incidentally it was around the same basic time frame as what, .... 9-11 ... Bush, the younger, called off the FBI snoop dogs, in regards to investigating "white collar crime", in 2004, when, the FBI wrote memo stating such crimes were massive, wide spread and systemic. Instead, they were directed to FOCUS, on terrorism ...

Anyone else see patterns forming ?

lincolnsteffens's picture

going after staffers?? What about department heads or officers??

Dirtnapper's picture

You go after the low hanging fruit and press them to roll over on their superiors for shorter stays at Club Fed. 

Giant Meteor's picture

Hmmmm, look whose getting thrown under the bus!

yrad's picture

8 years later!?!?! Hah, nothing will come of this.

Giant Meteor's picture

Not saying you're wrong, in a sense. On the other hand, I think its pretty well established, folks are runnin out of runway.

DetectiveStern's picture

Bingo, some junior clerk is gonna get fucked while the boss who told him what to do will get clean away with it.

Having worked as a junior clerk at a bank you have ZERO idea about how what your doing fits into the complete puzzle. I would get an email saying to move x amount of y currency from account a to account b, how am I meant to know what that is really doing? If you refuse then say goodbye to your job.

Giant Meteor's picture

Banks, especially the "Bigs", multiple circle jerk, money laundering operations. Going "after" Deutsch, is the obvious play. I mean Christ, the apology, the arrest recently, splashin in all the headlines. Sacrificial lambs need sacrificing. Mordor, Mt. Doom demands atonement, and let's face it, the global inhabitants are getting a bit restless ..

Mandel Bot's picture

About fucking time someone went to Jail. But watch. It will be some rank and file peons.

The ones at the top will be untouched.

Orly's picture

Maybe not this time...

The can o'worms has been opened a bit more...

Giant Meteor's picture

I guess this is my point as well. The hat trick only works so long on the same marks ...

Maybe shelf live on the scam is expiring, which fits with the current "mood."

Yes We Can. But Lets Not.'s picture

I don't think it is right to go after wrong-doers here nine years later, after the extreme beating they all took in the severe prosecutions executed during the eight year reign of Obama.

To Hell In A Handbasket's picture

Come on, own the fuck up, which one of you Krauts refused to make a donation to The Clinton Foundation?

centerline's picture

Der Spiegal going apeshit in 3...2...1...

CheapBastard's picture

Can their mag cover get any more vicious and anti-American?

centerline's picture

I thought so a few months back.  They seem to keep raising the bar.  Impressive actually.  I actually bookmarked them again just to see whats next.  lol.

BigWillyStyle87's picture
BigWillyStyle87 (not verified) Feb 8, 2017 12:30 PM

How about probing individuals that rigged gold/silver prices? No? Didnt think so.

business as stusual's picture

JPM silver rigging case back on. Don't hold your breath just yet.

Dirtnapper's picture

Won't happen until after Trump has his cabinet filled.   Once PM prices rise because the rigging has stopped, the derivative market will pop and Trump has to be able to fire someone to take the heat off of him.


corporatewhore's picture

Go after MERS--the real culprit.  

When you slice and dice and can't prove who owns what, what judge can overturn 500 years of real estate legal precedent?  Almost all of them did just that.  Thank the banks and their campaign contributions.

VWAndy's picture

 Lets see the banks document control records.

chunga's picture

Still my all-time favorite quote re: Douche Bank:

Judge Arthur M. Schack of Kings County, New York in Deutsche Bank Nat. Trust Co. v Harris (Feb. 5, 2008 - Index No. 39192/2007)

“Further, the Court requires an explanation from an officer of plaintiff DEUTSCHE BANK as to why, in the middle of our national sub-prime mortgage crisis, DEUTSCHE BANK would purchase a non-performing loan from [bankrupt and now dissolved] INDYMAC….”

Orly's picture

Anybody wanna bet Jon is steady packing his stuff?

small axe's picture

justice delayed, justice denied.

business as usual

VWAndy's picture

 So when should we expect to find out where all the deeds went and when and how they got there. Then maybe we can talk about where they are supposed to be.

Chippewa Partners's picture

$$$ changes hands.  Attorneys take their cut.  Media spin.   It's over. 

"without admitting or denying the allegations"

besnook's picture

but goldman sucks is off limits. why do they revive a veneer of ethics for the german bank?

conspicio's picture

Steve Bannon = ex GS (80s)
Gary Cohn = GS (current)
Steve Mnuchin = GS (current)
Anthony Scaramucci = ex GS

SuperRay's picture

Only two Jews out of four guys from Goldman. We must have crossed over into a parallel universe

Greenspazm's picture

DOJ Launches Probe - anal, urethral or vaginal?