* Move comes after U.S. whistleblower raises allegations
* Probe centres on allegations of false valuations - sources
* Deutsche Bank declines to comment on probe
FRANKFURT, April 4 Germany's Bundesbank and
financial watchdog Bafin are conducting an in-depth probe of
Deutsche Bank AG's accounts over allegations that it
failed to correctly value a derivatives portfolio, sources
familiar with the investigation said.
Two of the sources said on Thursday that Germany's central
bank was reacting to accusations that Deutsche Bank had
incorrectly valued credit derivatives from 2007 through 2010,
allowing it to hide as much as $12 billion in losses.
"This is a routine investigation. There is no prejudgement,"
one of the people, who is close to the investigation, told
Reuters, saying the regulators were starting with the assumption
that Deutsche Bank's accounts were in order.
The person said the probe would include trips to New York to
meet the people who had made the allegations. "But the
investigators have not been there yet."
Deutsche Bank has said the allegations were unfounded and
declined to comment on the investigation.
The Bundesbank said it could not provide information on
measures that affect individual institutions.
"Generally, you can assume that we pursue any allegations
that are made to assess their validity," a Bundesbank
spokeswoman said. Bafin declined to comment.
The Financial Times reported in December that three former
Deutsche employees had filed complaints with U.S. securities
regulators claiming the bank failed to recognise up to $12
billion of unrealised losses during the financial crisis.
At the time, Deutsche Bank said the allegations were more
than two and a half years old and that an investigation by a law
firm had found them to be wholly unfounded.
Reuters had previously reported on a Sarbanes-Oxley
whistleblower action filed against Deutsche Bank in May 2010,
alleging that some of the assets in a derivatives portfolio may
have been improperly valued in order to hide trading losses.
In an internal presentation given by Bill Broeksmit, head of
risk and capital optimisation at Deutsche Bank in June 2011,
Deutsche Bank said it had been able to unwind a large portion of
its credit derivative portfolio without taking heavy losses, a
sign that some buyers had broadly accepted Deutsche's view on
how to value certain assets.