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Harry Cassin Publisher and Editor

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Julie DiMauro Contributing Editor

Thomas Fox Contributing Editor

Marc Alain Bohn Contributing Editor

Bill Waite Contributing Editor

Shruti J. Shah Contributing Editor

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FCPA Blog Daily News

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Monday
Jan092017

Deutsche Bank anti-financial crime chief quits after six months on the job

The head of Deutsche Bank AG’s financial-crime-fighting unit and chief AML reporting officer left his his job after just six months.

Peter Hazlewood stepped down because of an internal dispute over the size of his group's budget and workforce, the Wall Street Journal reported.

He was replaced Thursday by Philippe Vollot.

Vollot previously served as Deutsche Bank's Chief Operating Officer for regulation, compliance, and anti-financial crime. He's been with the bank for more than 13 years.

Hazlewood wanted to hire more than 600 people in 2017 for compliance and anti-money laundering functions, the Wall Street Journal said. Management approved about 400 additional employees.

That would bring staffing of Deutsche Bank's global anti-financial crime unit to about 1,160 people, the WSJ said.

Hazlewood and other compliance managers complained that "without the 200 more people requested, Deutsche Bank would lag behind competitors and struggle to complete projects and adequately beef up its anti-crime teams and technology," the Wall Street Journal said.

Deutsche Bank is the biggest Germany-based bank. It has more than 100,000 employees in about 70 countries. Revenues were about $33 billion in the latest reporting year.

Germany’s Manager Magazin first reported Hazlewood's departure last week.

​Deutsche Bank doesn’t disclose the size or budget of its anti-financial crime and AML unit. But a spokesperson told the Wall Street Journal "the bank has committed to increasing its 2016 anti-crime unit headcount by 50 percent by the end of 2017."​

Hazlewood joined Deutsche Bank in July with 29 years of experience. He previously worked at JPMorgan Chase, Standard Chartered, and HSBC Holdings.

Last month Deutsche Bank announced a tentative $7.2 billion deal to resolve a U.S. investigation into its sale of toxic mortgage securities. The DOJ hasn't signed off on the deal yet, the bank said.

The U.S. Commodity Futures Trading Commission filed a civil complaint in federal court against Deutsche Bank AG in August. The complaint alleged a software update went wrong and crashed part of the bank's reporting system for five days. Deutsche Bank had agreed with the CFTC to appoint an independent reporting compliance monitor. But the agency alleged the bank still wasn't in full compliance with reporting requirements.

FINRA -- the biggest independent regulator of securities firms doing business in the United States -- fined Deutsche Bank's securities unit three times in 2016.

In December, FINRA fined Deutsche Bank Securities Inc. $3.25 million for failing to provide the same information to all users of its off-exchange trading system.

In August, the securities unit paid a $12.5 million fine for sending out internal alerts -- hoots and squawks -- that might contain confidential information traders and their customers could use. FINRA said Deutsche Bank ignored multiple red flags about potential confidential information leaking to salespeople and their customers.

In July, the regulator fined Deutsche Bank Securities $6 million for failing to provide complete and accurate trade data to FINRA and the SEC. It was the biggest fine FINRA had imposed for so-called blue sheet violations.

Deutsche Bank AG could still be fined in connection with a pending U.S. government investigation of Russian stock trades, the Wall Street Journal said. 

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Richard L. Cassin is the publisher and editor of the FCPA Blog