April 3 Germany's central bank has launched a
probe into claims Deutsche Bank misvalued credit
derivatives that allowed the bank to hide up to $12 billion in
losses, the Financial Times reported on Wednesday, citing people
familiar with the situation.
Investigators from the Bundesbank are set to fly to New York
next week as part of an inquiry into the allegations, the
financial daily reported on its website.
The Bundesbank investigators intend to interview people,
including former employees, who have knowledge of the company's
dealings in credit derivatives, the paper reported.
In December, the FT reported that three former Deutsche Bank
employees filed complaints with U.S. securities regulators
claiming the bank failed to recognise up to $12 billion of
unrealised losses during the financial crisis.
Also in December, law firm Labaton Sucharow LLP said Eric
Ben-Artzi, a former quantitative risk analyst at Deutsche, used
a whistleblower programme to tell the U.S. Securities and
Exchange Commission (SEC) the bank failed to report the value of
its credit derivatives portfolio correctly from 2007 through
Deutsche Bank reiterated a statement it made that month and
denied the allegations that it misvalued a portfolio of credit
It said the allegations are more than two and a half years
old and that an investigation by a law firm had found the
allegations to be wholly unfounded.
"The investigation revealed that the allegations stem from
people without responsibility for, or personal knowledge of, key
facts and information," a spokesman for Deutsche Bank said.
"We have and will continue to cooperate fully with our
regulators on this matter."
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 spokesman