Deutsche Bank DBK share price falls as offices raided by police

Deutsche Bank was among hundreds of financial institutions whose names cropped up in Panama Papers File

Deutsche Bank was among hundreds of financial institutions whose names cropped up in Panama Papers File

Deutsche Bank's Frankfurt, Germany, offices were searched Thursday as part of a Panama Papers-linked investigation. Investigators are looking into the activities of two Deutsche Bank employees who allegedly helped clients to set up offshore companies to launder money, it added.

The investigation is separate from another money laundering scandal surrounding Danish lender Danske Bank, in which Deutsche Bank has a role. The papers were from the Panamanian law firm Massack Fonseca, reported to be one of the world's biggest creators of shell companies.

They contained evidence of widespread abuse of the global financial system including tax avoidance and evasion by celebrities, politicians and corporations.

German authorities suspect that Deutsche Bank employees helped clients set up offshore companies in tax havens to launder hundreds of millions of euros. The German authorities began looking into the potentially illegal actions of the country's largest bank as a result of those document leaks.

The investigation was launched after evaluation of the explosive Panama Papers tax haven revelations and the previous Offshore Leaks report of offshore bank accounts, according to a government spokesman, Nadja Niesen.

Among recent cases were the Netherlands' Rabobank and Denmark's Danske Bank, the latter infamously laundering more funds than cryptocurrency's entire market cap.

Other Deutsche offices in the city were searched in an operation involving about 170 police and officials.

The news comes as Deutsche Bank tries to fix its tattered reputation after three years of losses and a drumbeat of financial and regulatory scandals.

In April, John Cryan was replaced by Christian Sewing as CEO. He trimmed US operations and reshuffled the management board but revenue has continued to slip.

The timing of the raid inflicts more pain on Deutsche Bank after a series of setbacks and repeated failures in keeping misconduct in check have pushed the shares to all-time lows.

Weaknesses in Deutsche Bank's controls that aim to prevent money laundering have caught the attention of regulators on both sides of the Atlantic.

The bank has publicly admitted it needs to do more to improve its processes record after months of negative attention.

United Kingdom regulator Georgina Philippou said at the time: "This case stands out for the seriousness and duration of the breaches by Deutsche Bank - something reflected in the size of today's fine".

The bank signed a $7.2 billion settlement with the US Department of Justice in 2017, after being accused of having sold investors bad mortgage-backed securities between 2005 and 2007.

Deutsche Bank has spent more than US$18b paying fines and settling legal disputes since the start of 2008, according to company disclosures compiled by Bloomberg News.

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