SEC Probes Deutsche Bank CDO Deal With Paulson, Spiegel Says
The U.S. Securities and Exchange Commission is investigating a collateralized debt obligation transaction in which Deutsche Bank AG (DBK) allowed U.S. hedge fund Paulson & Co. to select mortgage-backed securities, Der Spiegel reported.
For a CDO called “START,” the bank allowed Paulson to bet against the securities without telling other investors, the German magazine said on its website. Goldman Sachs settled a suit by the SEC for $500 million over a similar transaction, according to Der Spiegel.
Like other lenders, Deutsche Bank is faced with lawsuits brought forward by retail and institutional clients who have lost money in the financial crisis, Deutsche Bank spokesman Frank Hartman said when contacted by Bloomberg News. The lender look into the claims carefully and, if they prove wrong, will defend itself vigorously, he said.
To contact the reporter on this story: Karin Matussek in Berlin at kmatussek@bloomberg.net
To contact the editor responsible for this story: Anthony Aarons at aaarons@Bloomberg.net.
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