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FACTDROP: Bundesbank opens investigation for Deutsche Bank


Bundesbank opens investigation for Deutsche Bank

Πηγή: New Europe
April 4 2013

On 3 April, the Financial Times reported that the Central Bank of Germany, Bundesbank has opened an investigation into claims that Deutsche Bank hid $12 billion in losses in order to avoid a government bailout.

People familiar with the situation said to FT that Deutsche Bank, during the financial crisis, managed to hide its losses with the use of misvalued credit derivatives. Therefore, the investigators from Bundesbank will go to US and interview the people who have knowledge of Deutsche’s derivatives dealings between 2006 and 2009.

One of the people, who accused Deutsch Bank for hiding huge losses, was Dr. Eric Ben-Artzi. Ben-Artzi used to work for the German bank, holding a Vice President position being responsible for examining the Bank’s activities regarding those highly complex financial products. According to Ben-Artzi's calculations, there were billions in liabilities that should have appeared on Deutsche Bank’s balance sheet but didn't. According to Spiegel, the former risk analyst is convinced that Deutsche Bank whitewashed the figures for high-risk transactions.

When Ben-Artzi was fired in 2011, he notified the US Securities and Exchange Commission (SEC). However, it turned out that he wasn't the first. In the spring of 2010, another Deutsche Bank employee, a trader named Matthew Simpson, told his superiors that complex transactions had been posted incorrectly. Moreover, another employee had also reportedly informed the SEC about Deutsche Bank’s wrong accounting practice. According to Spiegel, Bundesbank is keeping an eye to Deutsche Bank since then.

On the other hand, Deutsche Bank told the FT that the allegations are more than two-and-a-half years old and that a law firm found them “wholly unfounded.” The law firm conducted an internal investigation into the Bank which revealed “that these allegations stem from people without responsibility for, or personal knowledge of, key facts and information," Deutsche said in its statement.

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