+++ M.P.O. (BBG) Deutsche Bank May Punish Employees for Personal Trade With Firm


…Deutsche Bank again…

…Are they ever going to get their act together …?

…Considering their track record and by the looks of it, the odds are that no.

…They are not going to get their act together any time soon.

…This pattern of “undesirable” behaviour seems to have taken control of that Bank, from bottom, to all the way high up there, including the Management which was heavily criticized yesterday at the Shareholders Annual Meeting.

…And also yesterday “shareholders voted down its new remuneration plan for top managers.” (FT)

   “In a non-binding vote at Deutsche’s annual meeting in Frankfurt, 51.9 per cent of shareholders voted against the scheme, with 48.1 per cent in favour.” (FT)

  Continuing with the FT…

«In view of the current situation of Deutsche Bank, and the significant increase in fixed salaries in recent years, we reject the new pay scheme for the management board.”

ISS, the influential shareholder adviser, had recommended that investors reject the pay plan.

All other motions at the meeting were passed. A shareholder proposal for a special audit of whether top staff at Deutsche breached their obligations in how they dealt with some of the bank’s legal entanglements was narrowly rejected, with 46.4 per cent of shareholders voting in favour, but 53.6 per cent voting against.

The proposal requested an investigation into whether Deutsche had to pay heavier fines because members of its management or supervisory board had failed to co-operate sufficiently with authorities.

Britain’s Financial Conduct Authority said last year that it had increased the penalty it levied on Deutsche for its involvement in the Libor scandal by £100.8m for insufficient co-operation during the investigation.

Deutsche’s supervisory board and its chairman, Paul Achleitner, have come in for harsh criticism from investors in recent months for waiting too long to overhaul the top management, as well as for allowing a boardroom dispute over how to deal with past problems to spill into the public domain.

This public wrangling unsettled shareholders, and drew further criticism on Thursday. Ingo Speich, a portfolio manager at Union Investment, one of Deutsche Bank’s top 20 investors, described the spat as a “scandal”.

Mr Achleitner, who has chaired Deutsche since 2012, said he “regretted” the public dispute and also acknowledged that there had been questions over his leadership.

However, the Austrian banker said he was “sticking to my duty and my responsibilities”. He added that he would have stood for re-election had the chairmanship been put to the vote at this year’s annual meeting.»

…Are you getting the picture…?

…I certainly am, and have come to my opinion on Deutsche Bank a long time ago.

…”That’s All Folks.”

Francisco (Abouaf) de Curiel Marques Pereira

Link to FT article Deutsche Bank investors vote against executive pay packages

(BBG) Deutsche Bank AG halted bonus payments to a group of employees while examining whether they improperly traded with the firm.

“We are reviewing a transaction that may have involved unacceptable conflicts of interest,” the Frankfurt-based company said in an e-mailed statement, without identifying past or present staff involved. “We will take disciplinary measures where appropriate and review further our controls to minimize the chance of a re-occurrence.”

The internal review focuses on Deutsche Bank’s efforts in 2009 to profit from differences in prices of credit indexes and the underlying debts that compose them, according to a person with knowledge of the situation. Six employees participated in their personal accounts alongside an external hedge fund, the person said, asking not to be identified because the review is confidential. The bank began scrutinizing the trading last year after it was flagged amid a broad push to reduce leverage, the person said.

Deutsche Bank Chief Executive Officer John Cryan, who succeeded Anshu Jain in July, is seeking to restore confidence in the bank’s management and staff conduct after legal bills cost the lender $9 billion since the financial crisis. Unresolved probes and claims have compounded investor concerns that the lender will be forced to sell stock should further fines erode capital.

“For the last three or four years, on a regular basis, there’s been misbehavior at Deutsche Bank,” said Dieter Hein, an analyst at Fairesearch-Alphavalue. “Deutsche Bank obviously needs a cultural change to fulfill their focus, to stop misbehavior and all these litigation charges that have burdened the bank over the past few years.”

Employee Profit

Internal auditors estimate the current and former employees made about $37 million on the transactions, the Wall Street Journal wrote in a report late Thursday. Colin Fan, co-head of the investment banking and trading unit when he left last year, may stand to reap $9 million on a roughly $1 million investment, according to the newspaper.

A spokesman for Fan said he had “fulfilled all appropriate compliance procedures, been entirely transparent at all times and denied any wrongdoing.”

Fan didn’t return calls and a message left on his mobile phone by Bloomberg.

Auditors haven’t determined whether Deutsche Bank lost money once related transactions are considered, the Journal cited an unidentified person briefed on the matter as saying. But excluding such ancillary revenue, a preliminary assessment shows the deal may have cost the firm more than $60 million, the publication said.

To tap outside capital, the transaction featured a special-purpose vehicle that sold senior and junior notes, the person said. Senior notes went to an insurer, which received a fixed return for taking on credit risk. Junior notes went to a hedge fund and the Deutsche Bank workers, the person said. The junior group got a fixed return, as well as the opportunity to benefit from various fees and trading in price differences in the credit market, the person said.

The bank’s investigation also examines the original rationale and approval process for the transaction, as well as how the deal was supervised, the person said.

A senior Deutsche Bank official in 2009 had granted permission for the trading, contingent on the bank marketing the offering to clients and earning a fair share of profits, the Journal said. People close to the matter disagreed over whether outside clients showed interest, it said. The bank has notified European and U.S. regulators, according to the newspaper.

Bafin is aware of the audit and the European Central Bank, the chief supervisor for region’s banks, could also review the matter, according to a person familiar with the case.

“Based on our findings to date, we believe that no client was disadvantaged by this transaction,” Deutsche Bank said in a statement. “In accordance with our usual practice, we have suspended the payment of variable and deferred compensation to certain individuals pending the outcome of our ongoing review.”