Deutsche Bank to Pay $4.4 Million Over Traders Who Misled on Bonds

By Dave Michaels 

WASHINGTON -- Deutsche Bank AG agreed to pay more than $4.4 million to settle regulatory claims that it failed to supervise traders who misled customers about the price of commercial mortgage bonds.

The Securities and Exchange Commission said Monday that the payment includes $3.7 million to reimburse clients that traded with the German bank, which also will pay a $750,000 civil penalty. Deutsche Bank's traders generated illicit profits by misleading customers from 2011 to 2015 about the prices they paid to acquire the securities, which allowed them to sell the bonds at higher prices, the SEC said.

The bank's former global head of securitized products trading, Ben Solomon, agreed to a one-year ban from the securities industry and will pay a $165,000 penalty, the SEC said. Mr. Solomon, 42 years old, was fired over the alleged misconduct in August 2015.

'"Deutsche Bank and Solomon failed to keep watch as traders generated profits for the firm at the expense of CMBS customers by misrepresenting purchase prices and other important details," said Daniel Michael, the head of the SEC's complex financial instruments unit.

A spokesman for Deutsche Bank said the bank "cooperated extensively with the SEC's investigation and took appropriate disciplinary action, including termination in some instances."

Write to Dave Michaels at [e-mail]

(END) Dow Jones Newswires

February 12, 2018 13:09 ET (18:09 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.