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Law

Deutsche Bank executives linked to fraud probe

PUBLISHED : Friday, 15 April, 2011, 12:00am
UPDATED : Friday, 15 April, 2011, 12:00am

Two senior executives from international banking giant Deutsche Bank were among 11 people arrested by the ICAC in an investigation into alleged bribery and fraudulent derivative warrant trading involving tens of millions of dollars.

The arrests took place after the Independent Commission Against Corruption launched Operation Leap Over on Tuesday.

In the following 48 hours, more than 50 anti-graft officers detained eight men and three women, aged 20 to 60, in raids across the city.

A person familiar with the investigation confirmed that two of those arrested were senior staff from Germany's biggest bank, which allegedly issued the warrants. The others were a stock investor and eight people accused of helping to push up the price of the warrants.

Two of those arrested were licensed representatives of a securities firm, the person said, adding it was thought the alleged racket had been going on for several years.

An ICAC spokesman declined to name either the securities firm or the bank involved.

The person familiar with the investigation said the two bank staff were 'very senior management'.

No one has been charged and the 11 were released on bail.

The probe began after the ICAC received a complaint of corruption. The two bank staff are suspected of conspiring to accept bribes from the stock investor and other persons for quoting favourable prices to them, thus enabling them to make profits in trading warrants. The 11 are also suspected of conspiring to defraud the bank and investing public by creating a false or misleading appearance of active trading in derivative warrants.

A Deutsche Bank spokesman declined to comment on the bank's employees or market rumours. 'Deutsche Bank's warrant business is operating normally and is committed to meeting our clients' market requirements.

'There has been no suggestion of any misconduct by Deutsche Bank,' he said.