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Monday, 6 July 2015 00:00 - - {{hitsCtrl.values.hits}}
FRANKFURT (Reuters): Frankfurt prosecutors are investigating five individuals in connection with Deutsche Bank’s participation in a global interest rate-rigging scandal, including four traders the bank dismissed in 2013, the prosecutor’s office said last week.
The prosecutors are also examining a detailed report on Deutsche’s involvement in alleged rate-rigging prepared by BaFin, the German financial supervisor, to see whether it can help their investigation, prosecutor and spokeswoman Nadja Niesen said.
BaFin completed its rate-rigging report in May and delivered it to Deutsche for comment. The prosecutor received BaFin’s final report about a week ago, Niesen said.
Prosecutors began looking at interest rate irregularities at Deutsche in 2014, she said, but the case became active only recently.
“The BaFin report has been with us for about a week. It first needs to be evaluated. Then it will become clear how further investigations are conducted,” she said.
The investigation adds to Deutsche’s legal difficulties and complicates the task incoming chief executive John Cryan faces in turning around the bank when he takes office on Wednesday.
Cryan was named CEO after the bank’s two current chief executives quit in June following a string of regulatory problems, failure to deliver on performance targets and a shareholder vote of no confidence.
Deutsche Bank declined to comment on the probe but repeated a statement issued on Friday.
“The BaFin report confirms our findings that no present or former member of Deutsche Bank’s Management Board or Group Executive Committee instructed employees to manipulate intra-bank offered rates submissions or was aware of any attempted manipulations prior to June 2011 when certain misconduct first came to light during the bank’s investigation of this matter,” the bank said then.
Deutsche dismissed five traders in 2013 for improper conduct following an internal investigation into attempted manipulation of the Europe Interbank Offered Rate (Euribor), a benchmark used to price financial assets.
One trader settled with the bank but four later sued successfully for reinstatement before they, too, then settled.
In April this year, US and British authorities fined Deutsche Bank $ 2.5 billion, accusing it of obstructing regulators and ordering it to fire seven employees over alleged benchmark interest rate rigging.
Earlier in June, a source told Reuters that BaFin had heavily criticised Deutsche Bank in its report investigating attempts to manipulate inter-bank interest rates.
