Deutsche Bank Fine Hits Credit Suisse and RBS Hard, Plus 3 Other Stocks That Are Getting Beaten Down Today

Royal Bank of Scotland Down Amid Fears of Justice Department Fine

Royal Bank of Scotland Group PLC (NYSE:RBS) shares have lost over 5% today after the US Justice Department asked Deutsche Bank AG (USA) (NYSE:DB) to pay $14 billion to settle an investigation into mortgage-backed securities. Investors are concerned that Royal Bank of Scotland could face a similar fine, as U.S. authorities have charged several banks over selling second-rate mortgage-backed securities recently, including Citigroup Inc (NYSE:C), JPMorgan Chase & Co. (NYSE:JPM) and Bank of America Corp (NYSE:BAC). As of the end of June, RBS had a reserve of $6.61 billion to cover litigation and fines, but the amount didn’t include any fines by the Department of Justice. On Wednesday, JPMorgan estimated that Royal Bank of Scotland will have to pay $3 billion to the Justice Department. Jim Simons’ Renaissance Technologies owns 1.81 million shares of Royal Bank of Scotland Group PLC (NYSE:RBS) as of the end of the second quarter.

Credit Suisse’s Stock Also Losing Value

Credit Suisse Group AG (ADR) (NYSE:CS) is down by approximately 4.9% so far today on the same news as RBS. Given that Deutsche Bank and Credit Suisse each sold about $14 billion worth of mortgage-backed securities, it could be facing a similarly hefty fine as the one just levied on Deutsche Bank. In other news, Reuters reported that Jeremy Stoler, a director in the commercial mortgage division of Credit Suisse’s asset finance group has left the bank. Mr. Stoler joined the Swiss financial services company around three years ago. Credit Suisse’s stock is down by approximately 39% so far this year. Ken Fisher’s Fisher Asset Management is one of the 13 funds in our database that had stakes in Credit Suisse Group AG (ADR) (NYSE:CS) at the end of June.

ITC Ready to Increase Duties on Steel Imports

Gerdau SA (ADR) (NYSE:GGB)’s stock is down by over 3.6% today as it faces blowback from the International Trade Commission’s recent announcement of its plans to impose antisubsidy duties on steel imports. The commission said the U.S. steel industry is being “injured” by subsidized imports from countries like Brazil, India, Korea, China, and Russia. Last week, Zacks Investment Research dropped its rating on the Brazil-based steel company to ‘Hold’ from ‘Buy’. The firm thinks that Gerdau faces risks in the form of increasing raw material costs, foreign currency fluctuations, and debt. At the end of the second quarter, 13 funds tracked by Insider Monkey owned shares of Gerdau SA (ADR) (NYSE:GGB).

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