Argentina Probes Deutsche Bank’s Dismissal of TraderCharlie Devereux and Pablo Gonzalez
Argentina’s central bank is investigating the dismissal of a Deutsche Bank AG currency trader to determine whether it was linked to a warehouse fire that destroyed industry documents this week in Buenos Aires.
The probe is part of a broader review of importers and exporters the central bank suspects may be withholding foreign currency overseas, Cabinet Chief Jorge Capitanich said today at a press conference in Buenos Aires. Argentine President Cristina Fernandez de Kirchner ordered the investigation into the Feb. 5 blaze at an Iron Mountain Inc. warehouse after an employee said fire precautions had been scaled back, Capitanich said. The fire, which killed nine people, destroyed files belonging to companies in industries from banking to telecommunications to energy, he said.
“Deutsche Bank didn’t have documents in the Iron Mountain deposit center which was unfortunately destroyed in a fire,” Renee Calabro, a spokeswoman for the company in New York, said in an e-mailed statement.
Deutsche Bank dismissed Ezequiel Starobinsky, a trader based in Buenos Aires, following an internal probe into allegations of currency manipulation, a person with knowledge of the matter said this week. Those allegations are unrelated to the case regarding importers and exporters that the Argentine central bank is reviewing.
The Frankfurt-based bank also let go three New York-based traders, the person said. Authorities in Europe, the U.S. and Asia opened probes into the foreign-exchange business after Bloomberg News reported in June that traders at the world’s largest lenders colluded to manipulate currency rates.
“The president has instructed the securities regulator to verify whether the companies it regulates had documents on deposit” at the Iron Mountain facility, Capitanich said. “It’s important to associate this with the fact that Deutsche Bank fired a currency trader in Argentina in the midst of investigations by international regulators for supposed manipulation in the currency market.”
Veronica Lara, a spokeswoman for Capitanich, declined to comment further on his remarks.
Restrictions imposed by Kirchner in 2011 on Argentines’ access to foreign currency spawned a black market for dollars where the peso trades at a difference of about 58 percent against the official exchange rate of 7.86 pesos per dollar, creating opportunities for arbitrage between the two rates.
Seven firefighters and two emergency services personnel were killed after the fire caused part of Iron Mountain’s warehouse in southern Buenos Aires to collapse.
Iron Mountain said in a statement Feb. 5 that the warehouse had a fire detection and sprinkler system and it’s investigating the cause of the blaze.