THE FINANCIAL Regulator has imposed a fine of €250,000 on Depfa ACS bank for several suspected breaches of the Asset Covered Securities Act.

The regulator says the settlement agreement published yesterday covered a fine agreed with the bank last Wednesday.

A spokesperson denied the agreement or its publication were connected to an Irish Timesquery last week on the matter. The regulator declined to provide further details on the number of breaches or the dates.

The breaches were uncovered after an approach by Depfa ACS bank to the regulator. A query to Depfa’s German parent Hypo Real Estate (HRE) group went unanswered yesterday. Depfa ACS Bank is a wholly-owned subsidiary of Depfa Bank Plc. It was registered in 2002 and its primary business is issuing asset-covered securities (ACS).

The regulator said it had “reasonable cause to suspect” that the bank had “failed on a number of occasions” to obtain its approval prior to making or amending an entry in its register of public credit-covered securities business.

Such pre-approval is required by the asset-covered securities legislation from 2001 under which Depfa ACS operates. The regulator noted that no investors suffered a financial loss as a result of the bank’s actions. In addition, the bank said new management and controls have been put in place to prevent a recurrence.

Depfa Plc employs approximately 260 staff in Dublin and 490 worldwide. The breach of Irish financial regulations by Depfa is cited in a complaint filed by lawyers acting for its HRE parent in a dispute with its former chief executive, Georg Funke.

Mr Funke was dismissed a year ago but is suing HRE for what he believes are outstanding contractual bonus entitlements worth a reported €3.5 million.

HRE is counter-suing, saying Mr Funke was correctly dismissed and that he has no further contractual claims on the company. Mr Funke was removed after the near-collapse of Depfa and Hypo Real Estate in September 2008.