FRANKFURT (Reuters) – German prosecutors have launched preliminary inquiries into the roles individuals may have played in connection with Deutsche Bank’s participation in the interest rate-rigging scandal, the Financial Times reported online on Monday.
Earlier this month, a source told Reuters that Germany’s financial watchdog Bafin had heavily criticized Deutsche Bank in its report investigating attempts to manipulate inter-bank interest rates such as Libor.
The German regulator has been investigating Deutsche Bank and the role it played during the financial crisis when a global inter-bank lending rate mechanism was being manipulated.
Now the Frankfurt prosecutor has opened a new line of inquiry after the report, which was highly critical of management’s behavior during the rate-rigging attempts, according to the FT.
Neither the bank nor the prosecutor were immediately available to comment.
Any new investigation would deepen Deutsche’s legal difficulties and complicate the task incoming chief executive John Cryan faces in turning around the bank when he takes office for the first time on Wednesday.
Cryan was named new CEO after the bank’s two current chief executives quit in June following a string of regulatory run-ins, failed performance promises and a shareholder vote of no confidence.
The newspaper quoted Nadja Niesen, a senior prosecutor, as saying that a preliminary investigation had been opened.
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“Those suspected are all represented by lawyers and are also aware of the process. How things proceed depends on the evaluation of the Bafin report, which has only recently been received,” Niesen was quoted as saying.
Deutsche Bank said on Friday, “The BaFin report confirms our findings that no present or former member of Deutsche Bank’s Management Board or Group Executive Committee instructed employees to manipulate intra-bank offered rates (IBOR) submissions or was aware of any attempted manipulations prior to June 2011 when certain misconduct first came to light during the Bank’s investigation of this matter.”
Bafin was not immediately available to comment.