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Deutsche Bank Said to Probe Subprime Auto Securitizations

  • Bank said looking at marketing and bond allocation practices
  • Bonds bundling auto loans have surged amid low interest rates
Updated on

Deutsche Bank AG officials are reviewing whether some employees exaggerated demand as they marketed new securities backed by risky auto loans, potentially suppressing yields for investors, according to a person with knowledge of the matter.

The bank has looked at communications between the employees and investors to determine whether such marketing practices were normal salesmanship or if they crossed a line, said the person, who asked not to be named because the matter is private. The lender has also looked at whether preferential treatment in the allocation of the bonds may have improperly given the biggest investors a leg up over smaller firms, the person said.