Deutsche Bank, Fired Euribor Traders Start Settlement Talks

Deutsche Bank AG and four Euribor rate submitters the lender fired last year agreed to enter court-monitored mediation to resolve the dispute.

The decision came after a Frankfurt appeals court urged the parties to settle at a hearing today. The judges were reviewing Deutsche Bank’s bid to overturn a labor court ruling that the traders were improperly dismissed because the lender didn’t have processes in place to prevent conflicts of interest when submitting data to calculate interest-rate benchmarks.

“There are risks for both sides,” Presiding Judge Astrid Nungesser told the parties at the hearing today. “You should consider court-mediated talks.”

Regulators around the globe are investigating the manipulation of financial benchmarks from the London interbank offered rate to currency exchange and gold prices. Deutsche Bank was one of six institutions fined in December by the European Commission for rigging Euribor, the benchmark money-market rate for the euro, and yen Libor, which reflects how much banks charge each other for loans in the Japanese currency.

Last year, the Frankfurt Labor Court ordered the bank to reinstate the employees, who made submissions for Euribor and Swiss Franc Libor.

While the bank still thinks it was right to fire the four men, it decided to follow Judge Nungesser’s advice, Christian Hoefs, Deutsche Bank’s attorney, said after the hearing.

Peter Roelz, the attorney for the traders, said labor court proceedings typically seek to find an amicable solution.

If the talks, which are private, don’t succeed, the appeals case proceedings will continue in September.

The lower court last year said while collusion between rate submitters and derivative traders may have happened, which would justify firing the traders, the bank didn’t have adequate internal rules and controls in place and didn’t see to it that rate submitting and derivative trading was adequately separated.

The bank had argued that the four exchanged improper instant messages with derivative traders at the lender about what data to submit to allow them to make more profit.

Today’s cases are: LAG Hessen, 14 Sa 1328/13 et al.

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