Deutsche Bank launches engagement survey with selected customers

(Reuters) – Deutsche Bank AG said on Sunday it had launched an engagement investigation with some clients after the Financial Times earlier reported that the German lender was investigating the alleged mis-sale of investment banking products .

“We have launched a survey regarding our engagement with a limited number of clients. We cannot comment on the details of the investigation until it is completed, ”a Deutsche Bank spokesperson said in a statement sent on Sunday evening.

The Financial Times reported that the lender was investigating whether its staff had falsely sold sophisticated investment banking products to clients in violation of European Union rules and then colluded with individuals at the within these companies to share the profits.

The internal investigation was sparked by complaints from customers last year, the newspaper reported, citing people familiar with the process, adding that the investigation initially focused on the office in Spain, which sells blankets. , swaps, derivatives and other financial products.

An audit had revealed that the bank had wrongly classified client companies according to the rules of the Markets in Financial Instruments Directive (Mifid), which oblige banks to separate their clients by levels of financial sophistication, according to the newspaper.

Sources told the newspaper that the lender believed some of its employees knowingly sold inappropriate or inappropriate products to customers who may not have been able to understand and shoulder the risk they were taking with it. these positions.

The investigation, called Project Teal, also examines accusations that there was collusion between employees of the German bank and the staff of some of the customers who purchased 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 drawing to a close and the bank will soon 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 notified.