Deutsche Bank AG dismissed two senior employees in its securitized-debt business as regulators investigate the lender’s trading of commercial-mortgage bonds.
Ben Solomon, global head of securitized-product trading, and Ashish Jain, who ran sales in the Americas for the group, left the company this week, according to two people with knowledge of the matter who asked not to be named because the information wasn’t public. Two others in their group were terminated in June, industry records show.
Jain declined to comment. An individual who answered Solomon’s telephone at Deutsche Bank said that he no longer worked there, and other contact information wasn’t immediately available. The Wall Street Journal reported the departures earlier Wednesday.
Trading in mortgage bonds and other securitized debt has come under heightened scrutiny since former Jefferies Group LLC bond trader Jesse Litvak was accused of criminal securities fraud for lying to clients.
Banks including Nomura Holdings Inc., JPMorgan Chase & Co., Royal Bank of Scotland Group Plc and Barclays Plc have also dismissed traders or put them on leave during the past two years amid the investigations, according to people with knowledge of those moves and Finra records.
Aaron Greenberg and Joseph Reardon, who worked in commercial mortgage-backed securities at Deutsche Bank, were terminated by the company in June after reviews indicated that each “violated firm policies with respect to customer communications,” records maintained by the Financial Industry Regulatory Authority show.
The dismissals came after the firm reviewed communications in response to a regulatory request for information regarding commercial-mortgage bond trading practices, according to the records.
Greenberg didn’t respond to a message left on his mobile phone. A message left at a phone number for a person with Reardon’s name wasn’t immediately returned.
Litvak was convicted in March 2014 by a federal jury in New Haven, Connecticut, of lying to buyers and sellers of mortgage-backed bonds. Litvak is appealing the decision, and one of three judges hearing the case said in May that he may have done nothing worse than what a homeowner does when selling a house.
Matthew Katke, a former Nomura trader of collateralized loan obligations, pleaded guilty in March to a fraud scheme in relation his activities while he worked at RBS. Katke, who agreed to cooperate with prosecutors, can withdraw his plea if Litvak wins his appeal.
Solomon joined Deutsche Bank in 2011 from Goldman Sachs Group Inc. to run CMBS trading, while Jain had been with the lender since 2003, according to Finra records. Greenberg, who also joined in 2011, was co-head of CMBS trading, and Reardon, who started at the bank in 2004, was a salesman in that group.