Bundesbank questions ex-Deutsche Bank employees in U.S.-sources
FRANKFURT, June 27 (Reuters) - Bundesbank officials met with former Deutsche Bank employees in the United States earlier this month as they investigated allegations the lender failed to correctly value a derivatives portfolio, sources familiar with the probe said on Thursday.
The Bundesbank was reacting to accusations made by a Deutsche Bank former employee alleging that the lender had incorrectly valued credit derivatives from 2007 through 2010, allowing it to hide billions of euros in losses.
Deutsche Bank said the allegations are unfounded and declined to comment on the investigation.
Bundesbank officials have also met with officials from the Securities and Exchange Commission (SEC), one of the sources familiar with the matter said.
German banks are supervised by the Bundesbank, together with German markets regulator Bafin. Both declined comment, as did the SEC.
In April, Reuters reported that Bundesbank officials would make trips to New York to meet the people who had made the allegations against Deutsche.
A Sarbanes-Oxley whistleblower has alleged that some assets held in a derivatives portfolio during the financial crisis may have been improperly valued in order to help Deutsche Bank hide trading losses.
In an internal presentation given by Bill Broeksmit, head of risk and capital optimisation at Deutsche Bank in June 2011, Deutsche Bank said it had been able to unwind a large portion of its credit derivative portfolio without taking heavy losses.
Story Copyright © 1999-2013 Reuters HedgeWorld All rights reserved.