Deutsche Bank has agreed to pay a fine of $205m to the New York State Department of Financial Services (DFS) to resolve allegations of unsound conduct in its foreign-exchange trading business between 2007 and 2013.

The fine follows a probe by DFS, which found the bank’s forex traders exchanging confidential information and rigging foreign exchange currency prices in online chat rooms, in a bid to boost profits and reduce competition.

The regulator found the bank’s employees making aggressive trades with the help of large trade position accumulated earlier and using it to move the fix price in a desired direction.

The bank was also accused of secretly increasing the “markup” charged to customers for trade execution, and intentionally failing to correct errors and making misleading entries in records to increase profits.

DFS superintendent Maria Vullo said: “Due to Deutsche Bank’s lax oversight in its foreign exchange business, including in some instances, supervisors engaging in improper activity, certain traders and salespeople repeatedly abused the trust of their customers and violated New York State law over the course of many years.”

As part of the settlement, the bank will have to submit written plans to DFS on internal controls and compliance.

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“DFS appreciates the Bank’s full cooperation with our investigation, including its own extensive internal investigation, and for taking several proactive steps to address prior to the Department’s enforcement action,” Vullo added.