Deutsche Bank’s Epstein Dealings Under Scrutiny in New York
(Bloomberg) -- New York state regulators are investigating Deutsche Bank AG's relationship with the disgraced late financier Jeffrey Epstein, adding another compliance issue to a growing list for Chief Executive Officer Christian Sewing.
The New York Department of Financial Services has been looking into the bank's dealings with Epstein as part of a broader look into the German lender's compliance and controls, according to a person familiar with the matter.
Epstein was arrested last year on federal sex-trafficking charges more than a decade after he pleaded guilty to Florida state charges of soliciting an underage girl for sex. His death in a New York City jail was ruled a suicide.
The investigation expands a list of headaches for Deutsche Bank under Sewing, who has made improving the lender's controls a centerpiece of his tenure. Other regulatory actions involve Fed criticism of the lender's liquidity management in the U.S. and a recently launched probe by the German watchdog BaFin into the bank's controls.
The unit at Deutsche Bank typically in charge of clients like Epstein -- the wealth management business -- was led by Fabrizio Campelli from 2015 until Sewing promoted him to the management board late last year. Sewing was also Campelli's superior in his previous role as head of the lender's Private and Commercial Bank division, which included the wealth management unit.
“Our reputation is our most precious asset. We regret the decision to associate with Epstein,” said Daniel Hunter, a Deutsche Bank spokesman.
The review of the Epstein accounts was first reported by the New York Times. Citing people familiar with the matter, the Times said the investigation could result in an enforcement action against the bank as soon as this month.
According to the anonymous sources cited by the Times, DFS is looking into the bank's decision to continue doing business with Epstein even after bank compliance officers alerted the federal government to several transactions in which Epstein sent money overseas in 2015.
©2020 Bloomberg L.P.
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