Ex-Deutsche Bank Traders Said to Sue Over Libor Probe

Four Ex-Deutsche Bank Rates Traders Said to Sue Over Dismissal
A logo sits on the exterior wall of Deutsche Bank AG's headquarters in Frankfurt. Photographer: Ralph Orlowski/Bloomberg

Deutsche Bank AG was sued for wrongful termination by four traders fired in the bank’s probe into alleged rigging of interbank lending benchmarks such as Euribor, two people familiar with the matter said.

Another banker, who was the most junior of a group of five fired in February, reached a settlement with the bank, said the people, who asked not to be identified as the matter isn’t public. The other employees are suing the bank in Frankfurt, Gesine Brackert, a spokeswoman for the labor court said, without commenting on the reasons for the dismissals.

Regulators from Canada to Switzerland are investigating whether more than a dozen lenders, including Deutsche Bank, colluded to rig benchmark interest rates including Libor and Euribor for profit or to mask their true cost of borrowing. Barclays Plc, UBS AG and Royal Bank of Scotland Group Plc have paid a total of about $2.5 billion in fines after admitting wrongdoing.

“Upon discovering that certain employees acted inappropriately, we sanctioned or dismissed employees, clawed back the unvested compensation of employees, and we will continue to do so as we complete our investigation,” said Ronald Weichert, a spokesman for Frankfurt-based Deutsche Bank.

The lender has fired at least seven employees over suspected misconduct in connection with rates. The bank, continental Europe’s largest by assets, said in February that while it would fire or suspend workers that acted inappropriately, it wouldn’t identify individuals.

Managing Directors

The traders that filed the employment lawsuit were based in Frankfurt and consisted of two managing directors, two directors and a vice president, two people with knowledge of the matter said in February. Submitting euro interbank offered rates was part of their responsibilities, the people said.

The Frankfurt labor court attempted to negotiate a settlement between the traders and Deutsche Bank in April, Brackert said. A hearing on the dispute scheduled for August has been postponed until September at the earliest, she said. Court documents in German lawsuits aren’t publicly available.

Inappropriate Communication

Deutsche Bank justified the dismissal of the employees in February by saying they had inappropriate communication with a trader the bank fired at the end of 2011 for trying to rig rates, said one of the people familiar with the matter.

Deutsche Bank isn’t the only lender to terminate traders over the rates probes. RBS has fired seven people for Libor-related misconduct, including two managers, a person familiar with the matter said in April. More than 25 people have left UBS after an internal review of interest-rate manipulation, a person familiar with the matter said in November.

Barclays has disciplined 13 employees and dismissed five, Rich Ricci, the bank’s former head of corporate and investment banking, told British lawmakers in November.

Deutsche Bank said last July that its internal rates probe found misconduct by individual employees though no wrongdoing by current or former board members.

Joaquin Almunia, the European Commission’s antitrust chief, said earlier this month that he’s seeking to settle probes into the London Interbank Offered Rate and Euribor by year end.

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