LONDON/FRANKFURT (Reuters) - Deutsche Bank has been forced by a German court to reinstate a Frankfurt employee whom New York regulators had ordered the bank to fire as part of a settlement over alleged interest rate rigging.
The Frankfurt Labour Court told Reuters on Wednesday it ruled in late 2015 that Deutsche Bank’s dismissal of a Frankfurt-based vice president was invalid and it obligated the German lender to continue to employ the staff member.
The Frankfurt-based vice president and Deutsche Bank declined to comment on the reinstatement.
Deutsche Bank was one of several large European and U.S. banks fined for allegedly failing to stop traders manipulating benchmark interest rate such as Libor, which are used to set prices for trillions of dollars of assets such as home loans.
U.S. and British authorities fined Deutsche Bank $2.5 billion in April 2015, accused Germany’s largest lender of obstructing regulators and ordered it to fire seven employees in the biggest global settlement over alleged Libor rigging.
“Certain employees involved in the wrongful conduct remain employed at the bank. The Department orders the bank to take all steps necessary to terminate seven employees, who played a role in the misconduct but who remain employed by the bank,” the U.S. Department of Financial Services said in April, 2015.
None was named by the regulator at the time.
New York’s banking regulator then, Benjamin Lawsky, ordered Deutsche to take steps to fire a managing director, four directors and a vice president based in London, as well as the vice president based in Frankfurt.
The Department of Financial Services in New York declined to comment on the reinstatement of the Frankfurt-based employee.
As part of the settlement, Deutsche Bank’s London-based subsidiary pleaded guilty to criminal wire fraud and the parent group entered into a deferred prosecution agreement to settle U.S. wire fraud and antitrust charges.
Shivani Mathur, who was Deutsche’s global head of economic resources based in London, and another of the seven employees Lawsky ordered to be fired, is suing the bank for alleged sex discrimination and unfair dismissal.
“We were ordered to terminate Ms Mathur’s employment in connection with a regulatory settlement,” a spokesman for Deutsche Bank said this week, declining to comment further.
Mathur’s hearing is due to begin on Jan. 21 in a London employment tribunal, according to court records.
A growing number of former bank staff are going to London employment tribunals and claiming they were unfairly fired after investigations into the alleged manipulation of Libor and foreign exchange markets.
Editing by David Clarke