German lender Deutsche Bank AG will pay US$37m to the State of New York and the US Securities and Exchange Commission (SEC) to end government investigations into how it routed trades to “dark pool” private trading venues, including its own, authorities said Friday.
Deutsche Bank in its settlement admitted that between January 2012 and February 2014, it misled traders about how it ranked trading venues, including its SuperX dark pool, and how it determined which dark pool it would send an order to, according to agreements with the SEC and the New York Attorney General’s office.
The bank said in a written statement it believed it had fixed the problems and was pleased to resolve the matter.
“Misleading and self-serving statements that defraud investors will not be tolerated,” New York attorney general Eric Schneiderman said.
Dark pools can benefit banks by keeping more orders in-house, reducing fees to stock exchanges. Customers generally seek a balance of minimizing fees while executing trades swiftly without moving prices in the market.
According to The Wall Street Journal, the US Financial Industry Regulatory Authority (FINRA) also issued a related US$3.25m penalty on Friday.
In addition, European stocks have dropped from a 2016 high. Deutsche Bank was among the worst performers on Monday, falling more than 4.4%, according to CNBC.
ExxonMobil is legally challenging a $2m fine from the US Treasury for allegedly violating sanctions against Russia in 2014 while US Secretary of State Rex Tillerson was still overseeing the company.
Morgan Stanley is moving staff to Frankfurt in time for the March 2019 Brexit deadline.
The US bank, which already has 350 employees based in the city, will transfer some trading activities currently undertaken in London and create a further 150 to 250 jobs according to reports.
BNP Paribas is the latest in a long line of financial service companies to be penalised for misconduct during the financial crisis on both sides of the Atlantic.