You Know You’re in Trouble When the DOJ Reads About Your Missteps in the Wall Street Journal: Deutsche Bank

Deutsche Bank, already under a deferred prosecution agreement for involvement in overseas corruption and market manipulation, just got a warning from the DOJ that it may have violated its deferred prosecution agreement in that matter. In January 2021, Deutsche paid a $130 million fine and agreed to a DPA for three years to settle up with the U.S. Then in August 2021, the head of the bank’s sustainability investment area expressed concerns to two executives that Deutsche had “overstated” its use of sustainable investing criteria to investors. She was fired and Deutsche did not disclose to the DOJ that it had received the complaint or that the complainant had been sacked. The Wall Street Journal then caught on, saw the e-mails, and wrote about the story in August 2021. The DOJ officials did a double-take, investigated, and warned the bank that its DPA is in jeopardy.

Deutsche Bank is the bank that can’t shoot straight — literally and figuratively — when it comes to compliance with the law. Despite ethics pledges and promises to toe the line, it just keeps dipping those toes into murky and sometimes black waters, especially in the underworld of international corruption. It is the DOJ’s call on whether to just go ahead with the original prosecution.

The key to successful completion of a DPA is to stay out of trouble for the negotiated period (three years in this case). With Deutsche Bank and its history, the DOJ should have known that’s just not possible. And when you can’t stay out of trouble the next best thing is to ‘fess up to the DOJ. Apparently, that too is a hurdle too tall for Deutsche Bank. The Barometer once warned a board of directors that their company was going to get a DPA from the Justice Department for the stunts they had just pulled. One director chirped, “But doesn’t everybody get a DPA these days?” Actually, the answer was, “No, no they don’t.” Most companies think that multi-million and multi=billion-dollar fines are not good for business and would prefer running their companies without an onsite federal monitor poking around and probing every nook and cranny. Still some companies suffer from the Deutsche Syndrome, which is so Alfred E. Newmany — “What? Me Worry?”.

About mmjdiary

Professor Marianne Jennings is an emeritus professor of legal and ethical studies from the W.P. Carey School of Business at Arizona State University, retiring in 2011 after 35 years of teaching undergraduate and graduate courses in ethics and the legal environment of business. During her tenure at ASU, she served as director of the Joan and David Lincoln Center for Applied Ethics from 1995-1999. In 2006, she was appointed faculty director for the W.P. Carey Executive MBA Program. She has done consulting work for businesses and professional groups including AICPA, Boeing, Dial Corporation, Edward Jones, Mattel, Motorola, CFA Institute, Southern California Edison, the Institute of Internal Auditors, AIMR, DuPont, AES, Blue Cross Blue Shield, Motorola, Hy-Vee Foods, IBM, Bell Helicopter, Amgen, Raytheon, and VIAD. The sixth edition of her textbook, Case Studies in Business Ethics, was published in February 2011. The ninth edition of her textbook, Business: lts Legal, Ethical and Global Environment was published in January 2011. The 23rd edition of her book, Business Law: Principles and Cases, will be published in January 2013. The tenth edition of her book, Real Estate Law, will also be published in January 2013. Her book, A Business Tale: A Story of Ethics, Choices, Success, and a Very Large Rabbit, a fable about business ethics, was chosen by Library Journal in 2004 as its business book of the year. A Business Tale was also a finalist for two other literary awards for 2004. In 2000 her book on corporate governance was published by the New York Times MBA Pocket Series. Her book on long-term success, Building a Business Through Good Times and Bad: Lessons from Fifteen Companies, Each With a Century of Dividends, was published in October 2002 and has been used by Booz, Allen, Hamilton for its work on business longevity. Her latest book, The Seven Signs of Ethical Collapse was published by St. Martin’s Press in July 2006 and has been a finalist for two book awards. Her weekly columns are syndicated around the country, and her work has appeared in the Wall Street Journal, the Chicago Tribune, the New York Times, Washington Post, and the Reader's Digest. A collection of her essays, Nobody Fixes Real Carrot Sticks Anymore, first published in 1994 is still being published. She has been a commentator on business issues on All Things Considered for National Public Radio. She has served on four boards of directors, including Arizona Public Service (1987-2000), Zealous Capital Corporation, and the Center for Children with Chronic Illness and Disability at the University of Minnesota. She was appointed to the board of advisors for the Institute of Nuclear Power Operators in 2004 and served on the board of trustees for Think Arizona, a public policy think tank. She has appeared on CNBC, CBS This Morning, the Today Show, and CBS Evening News. In 2010 she was named one of the Top 100 Thought Leaders in Business Ethics by Trust Across America. Her books have been translated into four different languages. She received the British Emerald award for authoring one of their top 50 articles in management publications, chosen from over 15,000 articles. Personal: Married since 1976 to Terry H. Jennings, Maricopa County Attorney’s Office Deputy County Attorney; five children: Sarah, Sam, and John, and the late Claire and Hannah Jennings.
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