Blowback? Just a few weeks after the EU slapped Apple with a $14 billion bill for “back taxes,” the U.S. has apparently responded with a $14 billion fine of their own to Deutsche Bank to settle an outstanding probe into the company’s trading of mortgage-backed securities during the financial crisis.
According to the Wall Street Journal, the proposed settlement would be largest fine paid by any of the banks related to similar charges. Unfortunately for DB, the fine is roughly equal to it’s entire market cap and the stock is plunging nearly 8% in after hours trading.
A DB spokesman confirmed back in July that negotiations had been initiated with the DOJ though no estimates had been provided on the size of any potential settlement before today. That said, the Wall Street Journal notes that DB’s attorneys had privately suggested that a $2 – $3 billion settlement with the DOJ was probably in the ballpark. Meanwhile, wall street analysts had estimated settlements in the $2-$5 billion range. Any fines paid pursuant to current negotiations would be in addition to the $1.9 billion already paid in 2013 to settle other U.S. claims related to mortgage-backed securities.
Per the table below, as of June 30, DB had reserved a total of €5.5 billion for civil litigation and regulatory penalties on it’s balance sheet.
Read the Full Article: Source – Zero Hedge
Time For Truth: (Zero Hedge) – Deutsche Bank Slapped With $14 Billion Fine By DOJ Over Mortgage Probe