Deutsche Bank in .3 million settlement to shareholders over Epstein ties, Russian oligarchs

Deutsche Bank in $26.3 million settlement to shareholders over Epstein ties, Russian oligarchs

By Jonathan Stemple

NEW YORK (Reuters) – German Bank AG (NYSE:) has agreed to pay $26.25 million to settle a lawsuit against US shareholders accusing the German bank of lax supervision while doing business with dangerous and wealthy clients such as Jeffrey Epstein and Russian oligarchs.

An initial settlement involving all cash filed Friday in Manhattan federal court requires the approval of U.S. District Judge Jed Rakoff, who in June allowed the proposed class action to continue.

Shareholders led by Yun Wang, who traded Deutsche Bank (ETR:) stock in 2018 and 2020, claimed that the bank knew that its know-your-customer and anti-money laundering controls were ineffective, and that its share price fell as problems emerged. .

Deutsche Bank denied any wrongdoing in approving the settlement. CEO Christian Swing and predecessor John Cryan are also charged, and he has denied any wrongdoing.

A spokesman for the bank declined to comment. Since the seamstress took over in 2018, it has tried to show investors that Deutsche Bank has addressed deficiencies in internal controls.

The lawsuit blamed Deutsche Bank’s work with Epstein, the late financier and sex offender, and with the Estonia branch of Danske Bank, which was embroiled in a money laundering scandal.

The New York Department of Financial Services fined Deutsche Bank $150 million in July 2020 for its ties to Epstein and Danske Estonia.

Shareholders also objected to Deutsche Bank using oligarchs such as billionaire Roman Abramovich as clients, in what they described as the bank’s “relentless pursuit of profits”.

Friday’s settlement covers Deutsche Bank investors in the United States from March 14, 2017 to September 18, 2020.

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The plaintiffs’ attorneys said the $26.25 million in damages represented 49.4% of the “potentially recoverable” damages available, compared to an average of 1.8% in stable-class securities lawsuits in 2021.

Lawyers may ask for up to one-third of the settlement fund for legal fees.

The case is Karimi v. Deutsche Bank AG and others, US District Court, Southern District of New York, No. 22-02854.

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