Deutsche Financial institution Might Have Killed A Whistleblower Program, However It Didn’t Break Any U.S. Legal guidelines In The Complete 1MDB Mishegas
How big a disaster is Deutsche Bank? How unquenchable a raging dumpster fire? How mangled a car crash? How unappetizing a dog’s breakfast? How incredible a Teutonic train wreck? Well, dear reader, Deutsche Bank is a powerful enough black hole that, along with some incredibly stupid legislative drafting, it’s about to consume and destroy the Commodity Futures Trading Commission’s entire whistleblower program.
The executive had provided information that helped CFTC and Justice Department investigations that led to roughly $2.5 billion in settlements with Deutsche Bank in 2015, including $800 million with the CFTC. They alleged that the bank manipulated the London interbank offered rate, or Libor, a benchmark interest rate used to set short-term loans for global banks….
Agency leaders have contended there is no mechanism to pay the bank executive and other applicants and keep funding the whistleblower program.
The CFTC pays whistleblowers from money it collects in enforcement penalties. But the agency’s whistleblower fund can be replenished only when it falls below $100 million…. The Dodd Frank Act, enacted in 2010, said whistleblowers could collect between 10% and 30% of penalties or settlements reached with the companies accused of financial misconduct. The $100 million CFTC cap didn’t anticipate that a single award could exceed that amount.
Besides paying awards, the money is used to fund the whistleblower office, which attracts and handles whistleblowers, who are the source of or are helping with about one-third of the agency’s active investigations.
In other words, Deutsche Bank is such an unprecedented catastrophe that no one even 11 years ago could have predicted it would be forced to cough up so much in fines as to bankrupt a critical part of a federal agency. Given that impressive bit of potential collateral damage, you’d presume that whenever a regulatory authority decided to have a look-see, they’d find something wanting. Certainly, the Justice Department expected to do so when it opened its umpteenth probe into the Germans, this time over the sordid and lucrative matter of the 1MBD scandal. But, incredibly, no!
The DOJ sent a letter to notify the German bank that the investigation had been closed, people familiar with the matter said…. The move by the DOJ provides relief as Deutsche Bank was named on Monday as a defendant in a lawsuit brought by 1MDB seeking $1.1 billion in payments from the German lender….
Truly, an astonishing turn of events: Deutsche Bank got involved in a massive international fraud case and managed to not commit a single sanctionable action. Absolutely remarkable. Well done, guys.
Deutsche Bank 1MDB Probe Dropped by U.S. Justice Department [Bloomberg]CFTC Whistleblower Program in Peril Over Potential $100 Million-Plus Payout [WSJ]
