Deutsche Bank AG’s top supervisors are critical of how the lender handled an internal investigation into mis-selling of derivatives, raising questions about its findings.
(Bloomberg) — Deutsche Bank AG’s top supervisors are critical of how the lender handled an internal investigation into mis-selling of derivatives, raising questions about its findings.
The European Central Bank and German regulator BaFin have told the lender that the probe, known as Project Teal, took too long and wasn’t wide enough in their view, according to people familiar with the matter who asked not to be identified discussing private information.
Representatives for the ECB, BaFin and Deutsche Bank declined to comment on the news, which was first reported by the Financial Times.
Deutsche Bank recently closed the probe, which had been looking for more than two years at dozens of cases where some employees sold foreign exchange derivatives to small and medium-sized Spanish companies, even though they knew the products were too complex for those clients. The probe has led to settlements with affected clients worth tens of millions of euros and resulted in the departure of several employees, Bloomberg previously reported.
Fewer than a dozen Deutsche Bank employees have been sanctioned as a result of Project Teal, which targeted the London desk and some parts of the lender’s Spanish operations. The lender also looked at deals and controls beyond the involved London desk. Even though it didn’t find evidence that similar misconduct occurred elsewhere, some wider controls and procedures were changed as a result.
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