Deutsche Bank misvalued a giant derivatives' position, in an attempt to avoid a bailout in 2007, the Financial Times has reported. The allegation hails from three former employees, but is dismissed as untrue by the bank.
The United States Securities and Exchange Commission (SEC) was currently investigating claims that Deutsche Bank hid so-called paper losses to the tune of $12 billion (9.2 billion euros) accumulated between 2007 and 2009, the British business daily Financial Times (FT) reported Thursday.
FT reported that the loss was the result of a derivatives position worth $130 billion, which Deutsche Bank did not record at its market value during the turbulences in credit markets at the time. If accounted properly, Deutsche Bank's capital would have fallen to dangerous levels, and might have required a state bailout, the newspaper added.
The claim was reportedly made to the US regulators in 2010 and 2011 by three former Deutsche Bank staff, including two risk managers and a senior trader. Two of the former employees had alleged they were pushed out of the bank after reporting their concerns internally, while the third complainant left voluntarily.
However, Deutsche Bank told the FT that the allegations were publicly reported in 2011, and were subsequently the subject of a thorough investigation that would show they were "wholly unfounded."
In addition, Germany's biggest bank said the allegations were made by people "without personal knowledge of, or responsibility for, key facts and information."
The SEC declined to comment on the investigation towards the Financial Times.
uhe/msh (Reuters, dpa)