Deutsche Bank investigates deal that may have profited staff
Reuters
Published May 20, 2016 09:38AM ET
Deutsche Bank investigates deal that may have profited staff
FRANKFURT (Reuters) - Deutsche Bank (DE:DBKGn) is investigating staff involvement in a transaction suspected of causing a conflict of interest and has suspended bonus payments of the staff while the probe is ongoing, the bank said on Friday.
The Wall Street Journal reported on Thursday that six current and former employees had made about $37 million by chipping in their own money to trades between Deutsche Bank and a hedge fund in 2009 that were meant to remove some of the risk the bank had taken on from an insurance client.
The report said the employees included Colin Fan, its former co-head of investment banking, who is alleged to have made $9 million on a $1 million investment in the trades.
Fan left Deutsche last October, having made headlines in 2014 when he sent a video message to staff warning them not to be boastful or vulgar, and chastising those who he said had fallen short of established standards.
A spokesman for Fan denied he had done anything wrong and said he had met all appropriate compliance procedures and had been entirely transparent at all times. "Mr Fan is very confident the bank did not lose any money," he said.
Deutsche said it was investigating the case and examining its controls.
"We are reviewing a transaction that may have involved unacceptable conflicts of interest when structured in 2009," the bank said in a statement. It said that no client had been put at a disadvantage by the deal.
"As we conclude our investigation, we will take disciplinary measures where appropriate and review further our controls to minimize the chance of a reoccurrence," it said, adding that bonus payments to staff under investigation had been suspended.
The Wall Street Journal said bank auditors were examining whether the trades between Deutsche and the hedge fund had resulted in inflated fees being paid to the hedge fund and the bank's staff.
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Written By: Reuters
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