Deutsche Bank will pay $7.3 billion related to their handling of residential mortgage-backed securities. The settlement will serve two purposes, sending $3.1 billion to the government as a civil monetary penalty while $4.1 billion will be used for consumer relief purposes such as loan modifications and other assistance for homeowners and borrowers for at least five years.
Justice Department officials include in the lawsuit emails and conversations about the bank’s hidden losses and bad investments, and how employees would either hide or improve the situations.
Problems with Deutsche Bank manipulating core lending and foreign exchange rates, pushing toxic mortgages, helping hedge funds lessen their tax bills and failing to put in place proper risk controls have persistently infuriated regulators.
Now Barclays Bank will face a similar suit by the Department of Justice. From 2005 to 2008, Barclays, run since 2015 by Chief Executive Jes Staley, sold billions of dollars worth of fraudulent mortgages that it claimed were good as gold — but instead were “catastrophic failures,” the Justice Department claimed in its 198-page suit.
Jeffrey Newman represents whistleblowers.