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Deutsche Bank CEO May Have Lied To Bundesbank About Rate Rigging, BaFin Says
A lot has transpired at Deutsche Bank over the last three months. Let’s recap.
In April, Deutsche settled rate rigging charges with the DoJ for $2.5 billion (or about $25,474 per employee). A month later, the bank paid $55 million to the SEC (an agency that’s been run by former Deutsche Bank employees and their close associates for years) in connection with allegations it deliberately mismarked its crisis-era LSS book to the tune of at least $5 billion. On May 8, the bank’s head of structured finance Elad Shraga — who was instrumental in helping Deutsche become "an award-winning arranger of asset- and mortgage-backed debt — left the firm after 15 years. Then on June 5, US Attorney General Loretta Lynch announced the Justice Department would pursue new settlements with European banks over crisis-era MBS sales. Four days later, the bank’s headquarters were raided by authorities in connection with possible client tax evasion and on June 15, the firm’s global head of commercial real estate, Jonathan Pollack, defected to Blackstone.
Oh, and both CEOs resigned on June 7.
Now, Germany’s financial regulator says departing co-CEO Anshu Jain may have lied to the Bundesbank about LIBOR manipulation when he apparently denied having any knowledge of rumors that the fixes may have been fixed (so to speak) even as his inbox told a different story. FT has more:
Deutsche Bank’s senior management allegedly acted “negligently” over the fixing of Libor rates and Anshu Jain, its outgoing joint leader, may have lied to the German central bank, the country’s financial regulator concluded in a recent report that leaves Deutsche vulnerable to further action by authorities.
One of the bank’s biggest clients, Pimco, the asset management group, also lost out when one of Deutsche’s traders attempted to manipulate Isdafix, a key derivatives benchmark whose potential rigging is being investigated by US watchdogs.
The explosive conclusions are contained in a report into Libor-manipulation by BaFin, the German financial regulator, which has been seen by the Financial Times. It concludes that special “banking supervisory measures” should be considered for Deutsche.
Amusingly, BaFin says it was “astonished” to learn that anyone thought Anshu Jain had been cleared of wrongdoing:
“I have been astonished to learn [...] that the suggestion is that the audit by BaFin supposedly resulted in clearing the senior management of DB, especially Mr Jain, and that supposedly no banking supervisory measures are expected,” wrote Frauke Menke, head of banking supervision at the German watchdog, in the report, which was not made public. “I expressly want to point out that this is not correct.”
Mr Jain, who stepped down as joint chief executive earlier this month, is suspected by BaFin of having “knowingly made inaccurate statements” in a 2012 interview with Germany’s Bundesbank about the benchmark-setting process. He is accused of telling the central bank he had no knowledge of rumours of possible rigging in 2008, but contemporaneous emails about a meeting on the subject were forwarded to him at the time.
“I consider the failures with which Mr Jain is charged to be serious,” Ms Menke wrote, alleging that he created an environment “which favoured behaviour involving the exploitation of conflicts of interest”
Mr Jain oversaw a reorganisation in London that involved traders and submitters sitting together and sharing information, according to the report.
The report does not conclude that the management board directly knew of or ordered Libor rigging by the bank’s traders, nine of whom are named in the report. It is understood that the bank will dispute several of BaFin’s concerns, including that Mr Jain may have deliberately misled the Bundesbank or been responsible for the seating-plan reorganisation.
The report also raises the spectre of Isdafix for the bank: BaFin found that a New York-based trader tried to rig Isdafix in 2010 in order to bolster the value of an option at the expense of Pimco. It was only when the fund manager complained that the matter surfaced, resulting in an undocumented verbal warning, according to BaFin.
Deutsche then took another four years to cut the bonus of the trader in question, according to the report. It was Mr Jain who headed the relevant division at the time, BaFin adds.
Got it.
So basically BaFin thinks Anshu Jain might have known his traders were manipulating LIBOR and also might have taken around a half decade or so to punish a trader who PIMCO apparently caught manipulating IR swaps.
While none of this should come as any surprise to anyone, what is disconcerting — if you're a shareholder anyway — is that there doesn't seem to be a light at the end of the tunnel here when it comes to allegations, investigations, litigation, and fines. Having already shelled out some $9 billion over three years for legacy litigation, and with key employees defecting like rats from a sinking ship, one is certainly left to wonder if the firm is essentially rotting away at the core.
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Too White to Lie !!!!!!!!!!!!
He will now be promoted to head the German Central Bank, as lying is a great quality in Central Banking circles.
Banksters lie? Say it ain't so!
Once they start lying they never ever EVER STOP. All of these cocksucking motherfuckers knew what their "traders" were doing. How do you think they could find some "lone, rogue trader" to throw under the bus to avert suspicion so quickly?
I thought it was a European tradition, as in "When it gets difficult you have to lie"?
Should have used Blackberry messanger. Rookie!
Rate rigging from counterfeiters! Oh, really?
Combined with an account on clintonmail.com
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Deutsche Bank going to be nationalized or allowed to collapse?
IMF bailout for Germany LOL
"Deutsche Bank going to be nationalized or allowed to collapse? "
You have it 100% backwards.
The question is: will the Citizenry of Germany ( and by extension the whole of Europe via the ECB -and possibly the Citizenry of the US via The FED ) be corporatized and effectively raided/sacked//indebted for multiples of it's GDP by a purposefully management hollowed-out 'privately' owned Deutche Bank.
Douche Bunk is toast. That is not all of the damage which they have done.
That is not the only lie they have told.
While the Greece Fire will be unextinguihable the real fuel for the Inferno is OIL...OIL Derivatives.
Cook yer Frankfurters. Duhayz good fer ya'all.
exaggeration, perhaps? lie is such a strong word. after all, we're civilized gentlemen. we learned our civilized ways from the British, Jain claims.
Dude is a bankster. That's what banksters do.
Copyright that! You just wrote the next Geico commercial!
Bankers lying to bankers. What is the world coming to?? Is there no honor amongst thieves??
no, they are backstabbing bitches
What bag? I'm not holding any bag. In fact, when the bag is found I won't be working here. So ha, fucking ha!
Methinks we're supposed to put on our "surprised faces."
I am Jack's total lack of surprise.
Off to Merkel's Odin Bedroom for Him!
lol...news flash, bankers & pols lie, often.
In other news, Justice Roberts will teach creative writing classes at Harvard Law ;-)
Lawyers protect the Bankers...The Bankers fund the Lawyers... The Lawyers are the Politicians....very simple to understand...
What the falkirk was he supposed to do? Tell the truth and lose his brakes on that tight bend on the way home. Die Bundesbank like the BOE like the Paymaster General FED are conducting the Orchestra as we reach the crescendo. I know nuffink! yeah right.
It would appear that the German fin sector is at the heart of all financil evil, or maybe they are just the test lab for this shit.
Make them bail out Greece as punishment.
The real questions is do banksters EVER tell the truth?
If one ever did, now THAT would be newsworthy!
I hope " Douche Bank" is forced to become a Credit Union... I want front row tickets to the hangings.
Of course he lied, just like they all do.
Section 1 of the Banking Exam involves passing a Lie Detector Test.
And we're surprised how . . . ?
A lying Indian at Deutsche Bank. Hes in good company.