- Chief Compliance Officer and VP of Legal Affairs, Arrow Electronics
By 
Aaron Nicodemus2022-09-26T18:18:00
Deutsche Bank agreed to pay $26.25 million to settle a class-action lawsuit filed by a group of the bank’s investors over anti-money laundering (AML) compliance failures and deficiencies related to certain clients, including Jeffrey Epstein and Danske Bank’s Estonia branch.
The proposed settlement, filed Friday in U.S. District Court for the Southern District of New York, covers the period from March 2017 through September 2020. U.S. District Judge Jed Rakoff, who allowed the class action to proceed in June, still must approve the settlement.
Through a spokesman, Deutsche Bank declined to comment. The bank denied wrongdoing in agreeing to settle.
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Both JPMorgan Chase and Deutsche Bank retained their respective Jeffrey Epstein relationships for too long. Yet, there is a case to be made for why exiting a high-risk relationship too soon can become an inverse form of recklessness.
Why did JPMorgan Chase retain Jeffrey Epstein for more than a dozen years? How did the relationship persist despite glaring red flags? The “why” is straightforward; the “how” is more complicated.
Jeffrey Epstein’s designation as a high-risk client should have subjected him to enhanced due diligence that never appeared to occur, most notably at Deutsche Bank. Instead, Epstein was allowed to continue his misconduct despite numerous red flags.
The U.K. has an ongoing problem with money laundering, but recent changes to economic crime law and corporate registration requirements could bring more cases to court, according to consultancy KPMG.
Enforcement actions in the first half of of 2024 by the Treasury Department’s Financial Crimes Enforcement Network highlight the importance of proactive measures in Bank Secrecy Act compliance rather than just being compliant.
The U.K Financial Conduct Authority published findings showing that financial services firms are implementing its guidance on politically exposed persons related to anti-money laundering inconsistently, with experts warning firms of reputational damage arising from potential enforcement.
