Deutsche Bank Co-CEO, Ex-Officials Cleared in Fraud Case

  • Court acquits Fitschen, Ackermann, Breuer in Kirch case
  • Facts dating back 14 years can't be fully cleared, judge says

Deutsche Bank AG co-Chief Executive Officer Juergen Fitschen and four former bank officials were acquitted of charges that they lied to judges during a decade-long dispute with a German media mogul.

The men were cleared Monday at a Munich court after a trial that lasted almost a year. The allegations against defendants including former CEOs Josef Ackermann and Rolf Breuer had been questioned by Presiding Judge Peter Noll for weeks.

Fitschen at a Munich court on April 19.
Fitschen at a Munich court on April 19.
Photographer: Christof Stache/AFP via Getty Images

The verdict is another setback for German prosecutors in a high-profile white-collar criminal trial. Last month, former Porsche Chief Executive Officer Wendelin Wiedeking and ex-Chief Financial Officer Holger Haerter were cleared by a Stuttgart court of charges they manipulated Volkswagen AG shares during a failed 2008 takeover.

"At the beginning there were certainly clear suspicions of wrongdoing, so it was legitimate to bring the charges and hold the  trial according to the rule of law," Noll said. "No one needs be ashamed about that. But after one year of trial they couldn’t be confirmed."

The Deutsche Bank executives were accused of deceiving judges in a civil lawsuit filed by Leo Kirch, who died in 2011, seeking 2 billion euros ($2.25 billion). Kirch claimed that Breuer caused his media company’s demise when questioning its creditworthiness in a Bloomberg Television interview that aired Feb. 4, 2002.

‘That’s Preposterous’

Noll roundly rejected theories submitted by prosecutors that the interview was part of a plan to drive Kirch into bankruptcy and allow the bank to seek the company’s restructuring work.

"You don’t kick someone in the shins to make him do business with you,” Noll said. “That’s preposterous."

Deutsche Bank’s legal disputes and fines for past misconduct have sapped its reserves as regulators ratchet up capital requirements as a response to the 2008 financial crisis. The Kirch dispute diverted the attention of the company’s senior management at a time when banks are trying to renew their business models to cope with record low interest rates and disruption brought by digital technology.

Bank Raids

While the underlying civil suit was eventually rejected, judges in that case said that Breuer, then-CEO Ackermann and two other managers lied to them. That comment prompted Munich prosecutors to open a probe in 2011 that led to several raids at the bank’s Frankfurt headquarters. Fitschen was added as a suspect in 2013.

Deutsche Bank spokesman Armin Niedermeier said Monday’s ruling backed the lender’s legal assessment of the dispute.

Noll said the court couldn’t fully clear all aspects of the case dating back from as far as 2002. While some facts and documents could be interpreted in the way that prosecutors had done, they could also be read another way, he said. Constitutional guarantees in criminal trials, like the presumption of innocence, require acquittals in these circumstances.

Glass ‘Half Full’

"Many times, the glass was half full and half empty when we looked at what conclusion to draw," said Noll. "You cannot cherry pick here and just use the elements that back your theory."

It was also only human that the accused didn’t remember all the details of meetings and possibly mixed up their recollection of events, he said. Former board member Tessen von Heydebreck, who had said with hindsight his testimony at the civil court was wrong, was to be acquitted for that reason, according to the judges.

"With Tessen von Heydebreck the court really had some troubles as his statement came pretty close to a confession," said Noll. "But we can’t rule out that at the time he thought he recalled the events this way and that leads to an acquittal."

Civil Settlement

The pressure from the criminal probes prompted Deutsche Bank to settle with Kirch’s heirs in 2014 after more than a decade of civil litigation. Deutsche Bank agreed to pay the family nearly 928 million euros and the matter has cost the bank a total of 1 billion euros, according to the invitation to the company’s annual shareholder meeting in May.

Noll today criticized the civil court ruling saying its finding that Deutsche Bank sought work from Kirch at the time wasn’t accurate. Even if Deutsche Bank had filed wrongful statements in the Kirch suit, there would be no fraud, as the accused knew the civil judges got it wrong, said Noll.

"An attempted fraud for 2 billion euros would indeed be quite outrageous," said Noll. "But here, the accused didn’t try to cause an error,” he said. “They aimed at preventing an error."

Fitschen told reporters after the verdict that the court backed what he had said from the very start. When asked why the bank had settled with Kirch given that Noll said there wasn’t a claim, Fitschen answered: “this isn’t the issue at stake today.”

Prosecutors had asked the court to sentence Ackermann to 2 1/2 years and Breuer to 3 1/2 years. Prosecutors also wanted the bank to pay a 1 million-euro fine. For Fitschen, who is scheduled to step down as co-CEO on May 19, prosecutors sought a 15-month suspended sentence. They requested a 21-month suspended sentence for former chairman Clemens Boersig.

Thomas Steinkraus-Koch, a spokesman for the prosecutors, said his office will review the court’s findings and then decide whether to appeal.

"We do our job, we don’t talk about victory or defeat," he said.

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