(Reuters) – Deutsche Bank AG said on Sunday it had launched an investigation into the engagement with some customers after the Financial Times reported earlier that the German lender was investigating the alleged mis-selling of investment banking products.
“We started an investigation into our commitment to a limited number of customers. We cannot comment on the details of the investigation until it is complete,” a Deutsche Bank spokesman said in an email on Sunday afternoon.
The Financial Times reported that the lender was investigating whether its staff were mis-selling sophisticated investment banking products to customers who breached EU rules and then collaborating with individuals from these companies to share profits. .
The internal investigation was triggered by customer complaints last year, the newspaper reported, citing people familiar with the process, adding that the investigation initially focused on the counter in Spain, which sells coverage. , swaps, derivatives and other financial products.
An audit found that the bank erroneously classified client companies according to the rules of the Markets in Financial Instruments Directive (Mifid), which require banks to separate their clients by levels of financial sophistication, according to the newspaper.
Sources reported in the newspaper that the lender believes some of its officials were knowingly selling inappropriate or inappropriate products to customers who may not have been able to understand and take the risk they were taking with these positions.
The investigation, called Project Teal, also examines allegations that there was collusion between German bank employees and the staff of some of the customers who bought the inappropriate products.
The scope of the investigation was later extended to the rest of Europe, but it was believed that only customers based in Spain and Portugal were affected, a source told FT.
The investigation is nearing completion and the bank will have to make final disclosures to regulators, the newspaper said, adding that the bank’s main regulators, BaFin and the European Central Bank, have been informed.
Reports from Kanishka Singh to Bengaluru; Edited by Peter Cooney and Diane Craft