Deutsche Bank AG is facing a union challenge to a casino investment as a result of its involvement in the London Interbank Offered Rate manipulation scandal.
The bank, which in April agreed to a $2.5 billion fine and settled fraud charges by U.S. and U.K. authorities, is being targeted by the Culinary Workers Union Local 226 in Las Vegas. The union has asked Nevada casino regulators to review the bank’s 25 percent ownership of Station Casinos LLC.
“We are gravely concerned about the suitability of Deutsche Bank to hold, through a subsidiary, a 25 percent equity stake in Station Casinos,” Maya Holmes, research director for the 55,000-member local, wrote in a June 17 letter.
The Culinary Workers Local 226 and Bartenders Local 165, affiliates of UNITE HERE, plan to picket Palace Station, a company casino near the Las Vegas Strip, on Friday.
In the letter, Holmes urged Tony Alamo, chairman of the Nevada Gaming Commission, and A.G. Burnett, chairman of the Nevada Gaming Control Board, to call hearings on whether the bank and its executives are qualified to continue owning the stake.
Burnett, in an e-mail Thursday, said the board is reviewing the matter.
“When someone presents us with information alleging that a licensee has done something inappropriate, we independently investigate that,” Burnett said in an e-mail. “Here, we have not reached any conclusions.”
Amanda Williams, a spokeswoman for Deutsche Bank, declined to comment on the letter. Casino regulators issue licenses to owners and review the backgrounds of large investors.
The union, which represents food-service workers and others in Las Vegas, is trying to organize employees at Station Casinos, a Las Vegas-based company that owns or manages 21 properties.
Station Casinos, controlled by brothers Frank and Lorenzo Fertitta, is considering an initial public offering, people with knowledge of the matter said in May.
The company could be valued at more than $3.5 billion, including $2.15 billion in debt, one of the people said then. That would suggest a value of about $337 million for the Deutsche Bank stake.
Deutsche Bank acquired the interest in Station as part of a 2009 bankruptcy court reorganization.
The bank’s April Libor settlement resulted in a record fine. It admitted to its role in manipulating the price of the Libor, a benchmark interest rate widely used by lenders and investors all over the world.
Read this next:
- Deutsche Bank: What China Can Learn From the 1987 ‘Plunge Protection Team’
- Deutsche Bank Claims NML ‘Harassment’ Over Argentine Bonds
- Gaming & Leisure Boosts Bid for Pinnacle Casinos by 32%