Deutsche Bank Investigated For Allegedly Hiding $12 Billion In Losses
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Germany’s central bank, the Bundesbank, is looking into allegations that former Deutsche Bank employees hid up to $12 billion in losses by misvaluing credit derivatives during the financial crisis, reported the Financial Times on Wednesday, citing people familiar with the situation.
Germany’s central bank, the Bundesbank, is looking into allegations that former Deutsche Bank employees hid up to $12 billion in losses by misvaluing credit derivatives during the financial crisis, reported the Financial Times on Wednesday, citing people familiar with the situation.
According to FT, German investigators are scheduled to fly into New York next week, where they intend to interview people, including former employees, who have knowledge of the company’s dealings in credit derivatives.
A Bloomberg source added that the central bank’s investigation however was still in its infancy, as Bundesbank officials were travelling just to examine the validity of the claims.
Deutsche Bank, which is the world’s largest foreign exchange dealer, refuted the allegations, describing them as “wholly unfounded.”
The allegations were “more than two and a half years old”, said a spokesman for the Bank, adding that the case had already undergone “a careful and thorough” investigation by a law firm, which also dismissed the claims.
[quote]“Moreover, the investigation revealed that these allegations stem from people without responsibility for, or personal knowledge of, key facts and information,” Deutsche said. “[Nonetheless] we have and will continue to co-operate fully with our regulators on this matter.”[/quote]Related: Deutsche Bank Latest To Face US Probe On Iranian Links
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Last December, FT reported that three former Deutsche Bank employees filed complaints with U.S. securities regulators in regards to similar allegations. The U.S. Securities and Exchange Commission (SEC) is also investigating the case, though no details yet have been released.
Additionally, according to Bloomberg, Deutsche Bank hired law firm Fried Frank Harris Shriver & Jacobson LLP in March 2010 to conduct an internal probe after a trader made allegations to similar but separate action. The bank reported the claims to the SEC, but it then also did not bring about an enforcement action.
