MercoPress. South Atlantic News Agency
US Justice Department demands US$14bn from Deutsche Bank for 2008 mortgages scam
The claim against Deutsche, which is likely to be negotiated for several months, far outstrips investor expectations. 
A number of banks have settled with US authorities over mis-selling of mortgage-backed securities: Morgan Stanley, Credit Suisse, HSBC, UBS, Goldman Sachs The US Department of Justice is asking Deutsche Bank to pay US$14bn to settle an investigation into mortgage-backed securities, the bank has said. However Deutsche Bank said it “has no intention to settle these potential civil claims anywhere near the figure cited.”
The claim against Deutsche, which is likely to be negotiated for several months, far outstrips investor expectations. The bank's shares fell more than 1.6% in after-hours trading.
“The negotiations are only just beginning. The bank expects that they will lead to an outcome similar to those of peer banks which have settled at materially lower amounts,” Deutsche Bank said.
The sale of residential mortgage-backed securities played a significant role in the 2008 financial crisis. Banks in the US have been subject to a number of investigations over allegations of giving mortgages to unqualified borrowers, then repackaging those loans as safe investments and selling the risk on to others.
A number of banks have settled with US authorities over mis-selling of mortgage-backed securities.
Morgan Stanley, Credit Suisse, HSBC, UBS have all paid out. Goldman Sachs settled for US$5.1bn in January this year.
In June, Deutsche Bank said it had set aside US$5.5bn to resolve pending legal matters. In April last year, Deutsche Bank paid US$2.5bn to settle American and British charges that it had manipulated the London Interbank Offered Rate, or Libor, affecting commercial interest rates.
Second-quarter earnings posted by Deutsche Bank in June showed net earnings of only US$22 million, amounting to a 98 percent year-on-year drop in profits. CEO John Cryan plans to cut 9,000 jobs worldwide by 2020. The bank's share price has fallen almost 10% to its pre-2008 situation.
Top Comments
Disclaimer & comment rules-
-
-
Read all commentsSo, lets look at what's happening here. The US pays big bucks to defend Germany and this is what the Eurotrash do to the economy.
Sep 18th, 2016 - 05:00 am 0You only have to look at Brazil at the moment, it is not so much big business that is ruining the country it is the politicians.We can afford it, you can't.
Sep 18th, 2016 - 08:30 am 0@1 Hepatia
Sep 18th, 2016 - 09:42 am 0The US is an occupying force in Germany, and has been since the end of WW2.
The US can always leave anytime it wants, no one's stopping you. I doubt the Germans care, they may even throw a party. I'm sure the Germans will be glad to see the back of the US. Of course, if the US military leaves Germany it'll cut down their so called 'defence shield' and shorten the US military's reach around the world.
But I always find it amazing that the US demands that these bills are settled but refused to pay compensation to India over the Bhopal disaster, and has refused to extradite Warren Anderson (who was arrested in India then fled justice and is hiding in the USA), the CEO of Union Carbide that was responsible for the deaths of THOUSANDS of people within hours, and thousands more over the years, to face charges of culpable homicide.
Yes the US really doesn't believe in justice, it just wants money. If it did believe in justice it wouldn't have been hiding an alleged mass murderer from justice all these years.
Yet during the BP oil spill, where no human lives were lost, the US demanded money and more money from BP, whist conveniently ignoring the fact that the part that failed was built and installed by a US owned company (who got away scot free).
You see human lives (especially non-white, non-American lives) mean nothing to the USA. So I hope that Deutsche bank tells them to foxtrot oscar, and the US Dept of Justice can concentrate on US banks that owe the US people lots of money instead.
Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!