Deutsche Bank to pay $10 million over spoofing charges, reporting failures: CFTC

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Deutsche Bank AG (DE:DBKGn) will pay more than $10 million to settle federal court charges of market manipulation and of alleged violations of data reporting obligations, the U.S. Commodity Futures Trading Commission said on Thursday.

Deutsche agreed to pay a $1.25 million penalty to settle the allegations that two of the bank’s traders engaged in numerous instances of a type of market manipulation called “spoofing” in Treasury futures and Eurodollar futures contracts on CME, the bank said in a statement.

The CFTC has been aggressively pursuing traders for the practice, a tactic designed to create a false appearance of demand. In 2018, the agency established a task force dedicated to rooting out this form of market manipulation.

Deutsche will also pay a $9 million penalty over separate civil charges for failures related to its business continuity and disaster plans and for violations of swap reporting requirements.

The charges stem from an issue in 2016, when an unprecedented outage in the bank’s swap reporting platform kept Deutsche unable to report data for multiple asset classes for five days, exacerbating existing report problems at the firm, the CFTC said. In 2015, Deutsche agreed to a CFTC order to improve its internal controls after being charged with failures in swaps reporting.

The penalty was substantially reduced because of Deutsche Bank’s cooperation with CFTC staff, which included agreeing to have a court-appointed monitor, the agency said.

“As reflected in both the settlement orders, we have taken meaningful steps to enhance our controls and are pleased to put these matters behind us,” Deutsche Bank spokesperson Dan Hunter said in an emailed statement.

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