Why Deutsche Bank Stock Is Sinking To Fresh Lows

Deutsche Bank AG DB's year just went from bad to worse with allegations of involvement in a money laundering case. The stock hit a fresh low Tuesday morning. 

What Happened

In public testimony, whistleblower Howard Wilkinson, who brought to light money laundering involving Danske Bank, said Monday that a European bank was used to siphon off nearly two-thirds of the $230 billion of suspect funds handled by Danske Bank.

Although Wilkinson did not name Deutsche Bank, a person familiar with the matter confirmed that the reference was to Deutsche Bank, which was one of the banks clearing dollar transactions for Danske Bank's Estonian branch, according to Reuters.

Reuters reported that Deutsche Bank confirmed that it provided services to Dankse Bank in Estonia. 

Deutsche said that it ceased processing payments for Dankse in 2015 after discovering suspicious activity, Reuters said. 

Why It's Important

The Department of Justice is investigating into the scandal, which also allegedly involves U.S. banks Bank of America Corp BAC and JPMorgan Chase & Co. JPM, according to Bloomberg. 

The Financial Times said the Danske Bank's Estonian branch was reportedly used by a U.K. limited liability partnership with links to Russian President Vladimir Putin and the nation's intelligence services.

What's Next

Deutsche Bank is already going through tough times. The bank reported its third straight year of losses in 2017. Despite the rollout of turnaround plans, the stock has been languishing in recent times. The bank's U.S. unit failed the Federal Reserve's annual stress test. 

At the time of publication: 

Deutsche Bank shares were down 4.71 percent at $9.31. 

Bank of America was down 2.59 percent at $27.04.

JPMorgan shares were down 2.48 percent at $108.06. 

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