Deutsche Bank AG was sued for breach of contract by a former employee convicted in 2012 of derivatives fraud by an Italian court.
Carlo Arosio filed a lawsuit against the German lender on Feb. 27 in London, according to court filings that didn’t give any further details about the claim. He’s seeking more than 6 million pounds ($10 million), according to a person familiar with the lawsuit who asked not to be identified because the amount hasn’t been released publicly.
Deutsche Bank, JPMorgan Chase & Co., UBS AG, Depfa Bank Plc and nine bankers they employed were convicted by a Milan judge in 2012 of hiding their profits from the sale of interest-rate swaps to the city. The banks, which were ordered to repay about 90 million euros ($123.6 million), sought to overturn the ruling in a trial that started in January.
“This is a breach of contract claim by a former employee, which we are reviewing and expect to defend successfully,” Frankfurt-based Deutsche Bank said in an e-mailed statement. Arosio declined to comment when reached by phone.
Arosio, one of the nine individuals convicted, was given a suspended jail sentence and banned from dealing with government entities for a year. He left Deutsche Bank in December 2013, according to the U.K. markets regulator’s register of finance workers.
Italian regions from Piedmont to the southern tip of Sicily have lost money on derivatives they bought to adjust interest rates on borrowed money. Milan agreed to unwind its swaps with the banks in March 2012 and settled civil lawsuits.
The case is: Mr Carlo Arosio v. Deutsche Bank AG London, High Court of Justice Queens Bench Division, HQ14X00861
A copy of the March 7, 2014 judgment overturning the convictions of the individuals mentioned in this article is available here.