Regulators fine Deutsche Bank Securities $7.5 million for misrepresenting delinquency data

Regulators fine Deutsche Bank Securities $7.5M

WASHINGTON — Deutsche Bank Securities Inc. has been fined $7.5 million for allegedly misrepresenting delinquency data related to the issuance of certain risky mortgage-backed securities.

Regulators said Wednesday that the company misrepresented and underreported the percentages of mortgages that were delinquent in information sent to investors for six securities issued in 2006.

Additionally, the Financial Industry Regulatory Authority, an independent regulator of U.S. securities firms, said the firm failed to correct third-party vendors and servicers who were underreporting historical delinquency rates on 16 other securities issued in 2007.

Regulators also said Deutsche Bank didn’t establish a system to monitor the reporting of such data.

Deutsche Bank Securities neither admitted nor denied the charges, regulators said.

“We have cooperated with FINRA throughout its investigation and are pleased to have resolved this matter,” said Renee Calabro, a spokeswoman for Deutsche Bank.

FINRA said delinquency rates are material to investors who invest in mortgage-backed securities because future returns are affected by borrowers who default on their loan payments.

Shares of Deutsche Bank fell $1.36, or 2.2 percent, to $60.53 in afternoon trading on the New York Stock Exchange.