Jan 24, 2021 10:30 PM EST
eutsche Bank AG is already starting an internal investigation over allegations that its own employees are part of a profit-sharing scheme. Bank employees were accused of mis-selling clients risky investments that they do not understand.
"We initiated an investigation in relation to our engagement with a limited number of clients," a bank spokesman said in a statement. "We cannot comment on details until all aspects of the investigation are complete."
The news of misdoing and subsequent inquiry was first reported by Financial Times. While investigation is now going to be conducted, the spokesperson refused to declined to confirm anything in the FT report or to entertain further questions, as reported by Bloomberg News.
Based on the report, Deutsche Bank has already scrutinized the actions of some employees after several clients made alarming complaints last year.
Reportedly, the Deutsche Bank placed clients' firms wrongly, violating the Markets in Financial Instruments Directive rules. Said policy require banks to caegorize or separate clients according to their financial literacy or financial sophistication levels.
Allegedly, bank employees were deliberately selling investment products unsuited to certain customers and taking advantage of their insufficient understanding of the risks involved in the said products. After selling them the products, the employees allegedly colluded with certain individuals to split the prodits.
The investigation focused first only onn a desk in Spain that sells hedges, swaps and derivatives, but has now expanded to other desks across across Europe to determine if it is a widespread practice. The bank wants to establish first if this mis-selling is a broad pattern of misconduct instead of an isolated occurrence only.
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This is not the first scandal that the German lender recently got engaged in.
Deutsche Bank recently committed to paying $125 million to resolve different U.S. probes into allegations that the bank made bribes to secure businesses abroad. Accusations involved manipulating metals markets, as claimed by some insiders.
The bank, following the inquiries, entered into a three-year deferred prosecution agreement in order to settle the amount, based on a document filed in federal court, as reported by CNBC.
Most of the dollar value penalties that the bank has to shoulder announced is linked to the accusation that Deutsche Bank employees went against the Foreign Corrupt Practices Act in how the secured dealings in China, Abu Dhabi, Saudi Arabia and Italy.
"Deutsche Bank engaged in a criminal scheme to conceal payments to so-called consultants worldwide who served as conduits for bribes to foreign officials and others so that they could unfairly obtain and retain lucrative business projects," Acting United States Attorney Seth DuCharme said earlier in a statement, at the time.
The company is accused of having weak controls in place since the 2008 Financial Crisis, as reported by Bloomberg.
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