Bundesbank Said to Investigate Deutsche Bank Over LossesZeke Faux
Germany’s Bundesbank is looking into allegations by former Deutsche Bank AG employees that the lender hid losses during the financial crisis, a person with knowledge of the matter said.
The central bank’s investigation isn’t at an advanced stage as officials examine the validity of the claims, said the person, who requested anonymity because the proceedings are confidential. German investigators are planning to fly to New York next week to conduct interviews with people including former bankers, the Financial Times reported yesterday. Michele Allison, a spokeswoman for Frankfurt-based Deutsche Bank, said the allegations aren’t true.
The claims “have been the subject of a careful and thorough investigation, and they are wholly unfounded,” Allison said in an e-mailed statement. “We have and will continue to cooperate fully with our regulators on this matter.”
Deutsche Bank hired law firm Fried Frank Harris Shriver & Jacobson LLP in March 2010 to conduct an internal probe after a trader alleged the lender masked paper losses during the financial crisis, Chief Financial Officer Stefan Krause, 50, told analysts and investors on a conference call in December. The bank reported the claims to U.S. Securities and Exchange Commission, the CFO said. The SEC hasn’t brought an enforcement action.
Deutsche Bank fell 0.9 percent to 30.50 euros by 9:05 a.m. in Frankfurt trading. The shares have declined 7.3 percent this year, compared with the 8.4 percent drop in the 28-company Euro Stoxx Banks Index.