NYT: Big Banks Face Another Round of Criminal Charges

U.S. prosecutors are discussing whether to press Deutsche Bank AG to plead guilty to interest-rate rigging, and they’ll probably charge at least one bank with currency manipulation this year, the New York Times reported.

Prosecutors overseeing a probe into whether Deutsche Bank rigged the London interbank offered rate, known as Libor, have started coordinating with U.S. regulators to limit any impact on the firm’s business if they pursue a guilty plea from the company or a subsidiary, the newspaper said, citing unidentified lawyers briefed on the matter. Authorities haven’t yet made a final decision, it said.

Deutsche Bank is cooperating in regulatory probes and conducting its own review of matters related to interbank offered rates, the Times quoted a spokeswoman for the Frankfurt- based lender as saying. Amy Chang, a spokeswoman for Deutsche Bank in Hong Kong, declined to comment when contacted by Bloomberg News.

“The market is pretty weak and this will be received badly by some investors concerned about how dramatic it could be,” Michael Seufert, an analyst at Norddeutsche Landesbank in Hanover, Germany, who has a buy rating on the stock said by phone.

Deutsche Bank fell 1.6 percent to 26.75 euros as of 12:15 p.m. in Frankfurt, extending the stock’s decline this year to 19 percent. The benchmark STOXX 600 Banks Index declined 1 percent.

The company increased its reserves for litigation and regulatory fines by about 450 million euros ($568.5 million) to 2.2 billion euros in the second quarter of this year.

Several banks will probably plead guilty to resolve the separate probe into manipulation of currencies, the Times said. It isn’t clear which bank will settle first or which will plead guilty, it said. The initial case may yet be delayed because prosecutors are contending with a heavy workload, the newspaper said.

UBS AG has been granted immunity by the Department of Justice’s antitrust division in exchange for cooperating with the currencies probe, though the bank still faces criminal prosecution, the newspaper said. A spokesman for UBS in Zurich declined to comment when contacted by Bloomberg News.