c.2019 New York Times News Service
Deutsche Bank acknowledged Wednesday that it had used faulty software to screen customer transactions for suspicious activity, another blow to the lender’s reputation as top executives prepare to face restive shareholders at its annual meeting.
Already under fire for lax money laundering controls, the bank confirmed the essence of a report in Germany’s Süddeutsche Zeitung newspaper that revealed software problems in its efforts to curb such activity. The bank maintained that no suspicious transactions had slipped through as a result.
“Deutsche Bank is working on correcting the error as quickly as possible and is in close contact with the regulators,” the bank said in a statement.
Coming after Deutsche Bank’s share price reached an all-time low this week, the newspaper report has helped fuel an extraordinary level of shareholder anger even by the standards of the perpetually troubled lender.
There is a movement among investors to vote on a measure expressing a lack of confidence in bank management at the annual meeting Thursday. Paul Achleitner, the chairman, is expected to survive with the help of several influential shareholders, but he is likely to face pressure to step down before his term’s scheduled end in 2022.
Deutsche Bank has faced repeated accusations that its lax scrutiny of customers made it a party to money laundering.
This week, The New York Times reported that anti-money-laundering specialists at the bank recommended in 2016 and 2017 that multiple transactions involving legal entities controlled by Donald Trump and his son-in-law, Jared Kushner, be reported to a federal financial-crime watchdog.
But Deutsche Bank, which has lent billions of dollars to the entities controlled by Trump and Kushner, never filed such reports.
In November, prosecutors, federal agents, police officers and tax authorities searched Deutsche Bank headquarters in Frankfurt, Germany, as part of an investigation into whether bank employees had helped customers use offshore tax havens to transfer money obtained illegally.