Deutsche Bank and Currency Rigging? Will the Scandal Go Away?

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Deutsche Bank AG was dealt a blow recently when a US justice dismissed claims by the bank that it had delayed a forex transaction to allow a ‘Last Look’ at how currency prices were moving. District Court Judge Schofield pointed out that Axiom Investment Advisors LLC and its investors would possibly seek damages for breach of contract against DB. British banking giant, Barclays recently paid $50 million to Axiom and its shareholders after it too was caught out in the way it handled currency exchange.

Deutsche Bank (DB) is one of a handful of major banks that has come under fire in recent months. It is accused of currency manipulation to bolster its own profits. The global forex market is valued at over $5 trillion per day. The issue at stake is the trading platform/program that included a delay in trade execution. This delay allowed for ‘rigging’ of the platform on the part of DB. The net result was a massive haul worth millions of dollars for DB. By simply rejecting or amending unfavourable trades, the bank could generate millions of dollars. Naturally, bad news travels fast and binary options traders have been going short on DB stock on Thursday, February 16 2017.

Deutsche Bank Looking Into President Donald Trump’s Accounts and Loans

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Deutsche Bank is under fire from many angles. But it’s facing increasing scrutiny since it is the bank that was responsible for loaning hundreds of millions of dollars to Donald J. Trump. With an intense Russia scandal now brewing, it appears that DB is going through Trump’s accounts with a fine-tooth comb to extract information about possible dealings with Vladimir Putin or his Russian cronies.

The loans from Deutsche Bank to Trump are viewed as unusual and the bank is looking for possible Russian guarantees. It wasn’t only Donald Trump’s accounts that were scrutinized, it’s also his daughter Ivanka and her spouse Jared Kushner. Investors have little patience for such scandal and they are net-shorting the stock, but traders are taking it day by day. On the bearish side of the spectrum, DB was recently fined £163 million by the FCA of the UK and $425 million by the NYDFS (New Department of Financial Services) for improper conduct.

The Trump Thump at DB

Fortunately for the US president, there is no evidence of a Russian connection but the bank is not being let off the hook so easily. The DOJ is closely examining DB and so is the House Ways and Means Committee. The bank is under review for alleged money laundering activities from Russia. There are also calls from Democrats to review Trump’s income tax returns. However, DB conducted extensive reviews of its business dealings with now President Trump. Nothing untoward has been found, but oversight committees are considering why the bank approved such big loans for Trump in the first place. Trump has collateral for his $300 million loans from DB, including a Washington DC Hotel, Trump National Doral in Miami, and the Chicago Tower Hotel. The Moscow branch of DB was responsible for laundering $10 billion of Russian money according to regulators.

As a trader going long on DB, you will be pleased to know that Deutsche Bank found no evidence of Russian guarantees for Trump’s loans. The sad news for DB bulls is that the bank posted a net loss of €1.4 billion this month.