Deutsche Bank’s Brokerage Unit Draws Investigation for Trading Leaks

Deutsche Bank has come under fire from regulators after allegations that its brokerage unit leaked information ahead of an earnings

A new month has seen a new wave of negative attention for Deutsche Bank, which now pits its brokerage unit, Deutsche Securities, against Japan’s Securities and Exchange Surveillance Commission, following allegations of information leaks regarding a Japanese company, according to a recent Reuters report.

Q4 2015 has been a forgettable chapter for Deutsche Bank and its investors, following myriad negative announcements and releases about the group’s global operations. In late October, the lender reported that a junior trader accidentally sent $6.0 billion to a US hedge fund, casting doubts on the prowess of its operational efficiency.

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What followed next was the antithesis of a holiday treat for shareholders when Deutsche Bank revealed that it was gearing up to cut nearly 35,000 jobs by 2020, including an intention to shed assets in excess of $4.4 billion.

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More recently however, Deutsche Bank has come under fire from the Securities and Exchange Surveillance Commission in Japan after allegations that its brokerage unit leaked information about the Japanese company and encouraged its clients to trade ahead of an earnings release – such behavior is widely frowned upon and constitutes insider trading.

The original allegations date back to December 2014. Deutsche Bank’s clients were facilitated trade shares of the company after an analyst obtained sensitive information passed it on to sales officials, according to the regulator – the Securities and Exchange Surveillance Commission did not disclose the company.

Consequently, Japan’s Financial Services Agency (FSA), the entity responsible for determining wrongdoing, punishment, or any consequent fine against Deutsche Bank, has conducted an investigation – a decision is expected in a matter of weeks.

Conversely, Deutsche Bank stated that it had previously identified and reported the issue to the Securities and Exchange Surveillance Commission, having since bolstered its internal measures to allay any repeat of what transpired.

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