REUTERS
Deutsche Bank has notified the Federal Financial Supervisory Authority of Germany (BaFin) on suspicions of money laundering operations carried out through its Moscow branch, Russian information agency PRIME has reported, with reference to the online edition of German business magazine Manager Magazin.
According to the publication, the amount of money laundered is equivalent to at least hundreds of millions of euros, with OTC (over the counter) derivatives transactions being carried out first, followed after a few seconds by sales transaction in the London OTC market. With the help of these transactions, rubles were exchanged into sterling. Other motives, such as the attempts to use small price differences in the two markets for arbitration, have not been identified, according to the publication.
The over-the counter transactions evaded transparency-ensuring procedures commonly in place on the stock exchanges, the publication further reports. At the same time, the origins of the funds were not verified at the bank either.
"If Deutsche Bank, as usual, had verified the origins of the funds, there is no way the transaction would have been carried out," a source in the bank told Manager Magazin.
The bank’s central office in Frankfurt has sent specialists from London and New York to conduct internal investigations. The investigation is led by Stephan Leithner, Chief Executive Officer Europe (including Russia) and Compliance.
The Federal Financial Supervisory Authority in Germany confirmed it was aware of the incident.
Deutsche Bank reported that "a small number of traders in Moscow" were sent on leave until the completion of the internal investigation to be conducted "in accordance with the highest standards." Deutsche Bank also warned it would take tough measures if it found there was any improper performance of duties by its employees.