Deutsche Bank Says Nein to Settlement Demand
Deutsche Bank AB is rejecting an effort by the U.S. Department of Justice (DOJ) to $14 billion in a settlement of charges related to its residential mortgage-backed securities (RMBS) activity in the pre-recession years.
According to a MarketWatch report, Germany’s largest lender began negotiations with the DOJ yesterday regarding allegations of seriously problematic RMBS issuance and underwriting between 2005 and 2007. Last week, a German magazine published an unconfirmed report that bank would be willing to enter a $2.4 billion agreement. But the DOJ’s reported demand for a $14 billion settlement—which is among the highest amounts that the department ever sought in a settlement related to the financial meltdown—was not welcomed by the bank.
“Deutsche Bank has no intent to settle these potential civil claims anywhere near the number cited. The negotiations are only just beginning,” Deutsche Bank said in a statement. “The bank expects that they will lead to an outcome similar to those of peer banks, which have settled at materially lower amounts.”
Deutsche Bank added that it was requested to make a counterproposal. The DOJ made no public comment on these negotiations.
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