Deutsche Bank AG signed a final settlement with the US Justice Department over its sales of toxic mortgages in the run-up to the 2008 crisis, resolving one of its biggest litigation risks.
The Justice Department said on Tuesday that the bank agreed to pay and admitted to misleading investors. The penalty was in line with the bank’s announcement that it had reached an agreement in principle in the matter and that it will pay a $3.1 billion civil penalty while providing $4.1 billion in relief to homeowners.
Attorney General Loretta Lynch said in a written statement: “This resolution holds Deutsche Bank accountable for its illegal conduct and irresponsible lending practices, which caused serious and lasting damage to investors and the American public, Deutsche Bank did not merely mislead investors: It contributed directly to an international financial crisis.”
The final settlement that had sent the company’s Shares to a record low in September 2016, when Deutsche Bank said the Justice Department had made an opening request of $14 billion to settle. The news prompted concern that the bank might not have enough capital and Deutsche Bank’s American depository receipts declined about 3% to $18.61 in New York.
Separately, the Bank will slash bonuses for senior employees by about 90%, a move that will be announced today, Spiegel reported.