NEW YORK: Deutsche Bank has signed a US$7.2 billion settlement with the U.S. Department of Justice over its sale and pooling of toxic mortgage securities in the run-up to the 2008 financial crisis, the government agency said on Tuesday. Deutsche has agreed to pay a $3.1 billion civil penalty and provide $4.1 billion in consumer relief to homeowners, distressed borrowers, and affected communities, the federal agency said, confirming the details furnished by the bank last December. Another bank accused of selling toxic mortgage securities, Credit Suisse, agreed to a $5.2 billion settlement with US authorities.Deutsche Bank's conduct between 2005 and 2007 fell short of standards and was "unacceptable," according to CEO John Cryan.The German bankDeutsche Bank ADR-listedshares on the New York Stock Exchange closed 3.2 percent lower on Tuesday. Deutsche Bank’s “troubling practices” were widespread, including when trader Greg Lippmann told colleagues that many home loans the bank was packaging into securities were “crap” and “pigs,” according to a 2011 U.S. Senate subcommittee report.
Deutsche Bank agrees to a $7.2 billion settlement with the U.S. Department of Justice over its sale and pooling of toxic mortgage securities in the years leading up to the 2008 financial crisis.