In January 2024, the Spanish National Securities Market Commission (CNMV) initiated disciplinary proceedings against Deutsche Bank for the alleged mis-selling of risky derivatives to small and medium-sized businesses. The bank is said to have marketed high-risk foreign exchange derivatives as low-risk currency hedges without adequately disclosing the downsides between October 2018 and March 2021.1
Deutsche Bank's internal investigation revealed instances of bad faith and the exploitation of internal control weaknesses by some employees. The firm had already paid substantial settlements and disciplined staff after several clients faced significant losses from these products. The CNMV said Deutsche's conduct "may constitute" a "very serious infringement" of Spanish securities law. Potential fines for such infringements can reach 10% of the annual turnover of the local subsidiary. The regulator stressed the bank's legal obligation to provide balanced, clear, and non-misleading information about complex derivative products.
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