Deutsche Bank is facing criminal investigations in Italy for alleged market manipulation relating to its mass sell-off of Italian government bonds in 2011, according to sources. The German lender also made the headlines recently in April, as it emerged that it was due to be presented with the final bill for LIBOR manipulation charges of at least 1.5 billion euros ($1.7 billion).
Prosecutors are reported to be questioning five people in connection with the case, including former chairman Josef Ackermann, former co-chief executives Anshu Jain and Juergen Fitschen, former risk chief Hugo Banziger and former chief financial officer Stefan Krause.
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The five ex-employees are suspected to have misinformed markets and regulators, stating publicly that Italy‘s sovereign debt was safe, while drastically reducing their bank‘s holdings of Rome bond issuances, from 8 billion euros ($9.1 billion) to less than 1 billion euros ($1.1 billion).
The sell-off, completed by June 2011 and preceded a few months earlier by a wider market confidence crisis on Italy‘s bonds, nearly brought the country to insolvency. Former premier Silvio Berlusconi, who resigned from office during the turmoil, later claimed that Deutsche Bank instigated the market panic, laying the ground for an international “coup d‘etat” that forced him to cede power.
Deutsche Bank is cooperating with authorities in Italy and today commented in a statement: “In 2011 we responded to a related inquiry made by Italian market regulator Consob and we provided information and relevant documents at that time.”