The Justice Department is seeking a $14 billion civil settlement with Deutsche Bank over the German financial institution's alleged role in artificially propping up the U.S. housing market in the lead up to the Great Recession.
Deutsche Bank shares traded in New York plunged 8.4% to $13.50 in pre-market action Friday after the company confirmed that Justice negotiators had staked out "an opening position" of $14 billion in their discussions.
The bank vowed to fight the government's demands.
"Deutsche Bank has no intent to settle these potential civil claims anywhere near the number cited," the company said in a statement. "The negotiations are only just beginning. The bank expects that they will lead to an outcome similar to those of peer banks which have settled at materially lower amounts."
The Justice Department is seeking a settlement over the bank's handling of home mortgage-backed securities and "related securitization activities" from 2005 to 2007, according to Deutsche Bank.
A Justice spokesman declined to comment.
German magazine Manager Magazin had previously reported that the Justice Department was expected this week to send a 100-page document to Deutsche Bank outlining a list of violations, identifying employees at fault and listing the fine it was demanding. The publication said the bank's fine could exceed a $2.38 billion tab paid by Goldman Sachs earlier this year to settle similar allegations.
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