Deutsche Bank Agrees to Pay $7.2 Billion for Misleading US Investors

© REUTERS / Wolfgang RattayPeople pass in front of a branch of Germany's Deutsche Bank in Cologne, Germany, July 18, 2016
People pass in front of a branch of Germany's Deutsche Bank in Cologne, Germany, July 18, 2016 - Sputnik International
The Deutsche Bank, the largest lender in Germany, has agreed to pay $7.2 billion to the US government and investors for being misleading in the sale mortgage-backed securities, the US Department of Justice said in a news release on Tuesday.

A statue is pictured next to the logo of Germany's Deutsche Bank in Frankfurt, Germany, September 30, 2016 - Sputnik International
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WASHINGTON (Sputnik) — As part of the settlement, the Deutsche Bank will pay a $3.1 billion civil penalty under the US Financial Institutions Reform, Recovery and Enforcement Act and give out another $4.1 billion in relief to underwater homeowners, distressed borrowers and communities, the release added.

"This resolution holds Deutsche Bank accountable for its illegal conduct and irresponsible lending practices, which caused serious and lasting damage to investors and the American public," US Attorney General Loretta Lynch said in the release.

The US government claimed that Deutsche Bank misled investors in the packaging, securitization, marketing, sale and issuance of residential mortgage-backed securities between 2006 and 2007.

"This misconduct, combined with that of the other banks we have already settled with, hurt our economy and threatened the banking system," Principal Deputy Assistant Attorney General Benjamin Mizer, head of the Justice Department’s Civil Division, said in the release.

US communities and homeowners continued to struggle because of Wall Street’s greed, Principal Deputy Associate Attorney General Bill Baer also said in the release.

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