Details were released Friday by The Investment Industry Regulator of Canada.
According to the IIROC documents, the Deutsche Bank agreed that it had received an email in the month of July in 2007 that included specifics regarding exposure to United States sub-prime mortgages in the Canadian market, and that it didn’t reveal the information to its clients. Neither did it forward the email immediately to its compliance department.
Duncan King, a spokesperson the Bank said, “We are pleased to have settled this matter.”
Asset-backed commercial paper ABCP, is a short-term debt mechanism with a typical maturity of 30 -180 days. The $32 billion Canadian ABCP market stopped suddenly in August of 2007 when investors were concerned that some of investments were supported by shaky American sub-prime mortgages.
Coventree Inc., Canada’s biggest seller of non-bank ABCP at the time, retained an investor presentation at the end of April in 2007, where it revealed that the overall American sub-prime exposure in its passage was 7.4 %, according to the settlement deal.
The company emailed all syndicate members, which included the Deutsche Bank, on July 24, 2007, displaying the various levels of sub-prime assets in its trusts. This exhibited that sub-prime monies accounted for 26% of all the assets in Planet Trust Series A.
In addition to the $1 million Fine For Deutsche Bank Securities Ltd., the National Bank agreed to pay out $75 million, the largest sum paid, followed by Scotia Capital that paid $29.3 million, and CIBC World Markets, that paid $21.7 million in fines.