FRANKFURT (Reuters) - German prosecutors have raided Deutsche Bank (DBKGn.DE) offices in Frankfurt in a search for evidence related to client securities transactions, as Germany’s largest lender struggles to break free of regulatory issues that contributed to an overhaul of its top leadership this week.
A source familiar with the situation said Tuesday’s raid was tied to a tax rebate strategy by some of the bank’s clients known as “dividend stripping”, in which a stock is bought just before losing rights to a dividend, then sold, taking advantage of a now-closed legal loophole which allowed both the buyer and the seller to reclaim capital gains tax.
Deutsche Bank confirmed the raid but declined to comment on what prompted it. A spokesman for the lender said no employees have been accused of wrongdoing in the case.
Frankfurt prosecutors carried out “wide-ranging investigative measures,” a spokesman for the prosecutors’ office said, declining to give details of the target or cause of the probe.
Deutsche Bank shares were the biggest decliners in Germany's Dax .GDAXI index of blue chip companies, falling 2.8 percent by 8 a.m. EDT. The Dax fell 0.9 percent, while the STOXX Europe 600 banking index .SX7P was down 0.8 percent.
The lender, which on Sunday announced the surprise departure of co-chief executives Anshu Jain and Juergen Fitschen following a sharp drop in shareholder confidence, has been straining to maintain its reputation in face of a raft of legal and regulatory problems.
Those problems have prompted billions of dollars in fines and settlements.
Authorities have repeatedly raided its offices in recent years, in connection with investigations linked to the collapse of the Kirch media empire and a tax fraud case related to the trading of carbon dioxide emissions rights.
A separate source familiar with the situation had said earlier on Tuesday that the latest investigation was related to German private bank Sal. Oppenheim, which Deutsche bought in 2010. The bank said the raid was not linked to Sal. Oppenheim.
Writing by Jonathan Gould; Editing by Maria Sheahan and David Holmes