A global bank headquartered in Germany will pay nearly $113,000 to the Iowa Public Employees Retirement system. The payment is part of a settlement Deutsche Bank reached with most of the attorneys general in the U.S., including Iowa Attorney General Tom Miller.
“Deutsche Bank did something that was pretty complicated but clearly and completely illegal,” Miller says.
Deutsch Bank manipulated a benchmark interest rate. It’s the rate banks charge each other on short-term loans.
“They were reporting a false rate…so their trading department could make money, unfairly and in doing that they harmed other people,” Miller says, “including, in our case, IPERS.”
IPERS — the Iowa Public Employees Retirement System — is the state’s largest pension fund. In addition to the payment to IPERS, Deutsche Bank will make payments to “any affected Iowa non-profit organization,” according to Miller. The bank has agreed to pay a total of $220 million as part of this nationwide settlement.
Miller says there’s “not a huge recovery” in Iowa because few government agencies and non-profits in Iowa did a lot of business with the German bank. Miller and 44 other state attorneys general were part of the settlement agreement.
“It’s clearly dishonest,” Miller says of the bank’s activities. “They were reporting an incorrect interest rate so that they could make money in their trading department as a result.”
The bank has agreed to notify any U.S. government agency or non-profit that may have lost money because of the bank’s interest rate manipulations. Deutsche Bank has paid $2.5 billion to resolve investigations in the U.S. and Britain. A unit in the bank has pleaded guilty in U.S. federal court to wire fraud. In July, the bank agreed to pay $77 million to settle investor lawsuits.