Corp-Ethics.com - Report: Misconduct fine for Deutsche Bank

Company	Deutsche Bank [Company Info]
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Date	Issue	Title
11th Apr 2006	Questionable Practice	Misconduct fine for Deutsche Bank

Report

The Financial Services Authority (FSA) has fined Deutsche Bank £6.3m (9.2m euros; $11.1m) for misconduct in its handling of share trades in two firms.

The FSA found the bank breached acceptable standards of market conduct in two share transactions handled by a London-based unit in 2004.

The fine is the third largest imposed on a firm for market misconduct by the regulator since 2001.

Deutsche Bank said it had tightened up its procedures in response.

The FSA found the bank had made errors in the purchase of shares in Swedish firm Scania in 2004, fining it £5.8m.

It was also fined £500,000 for failing to ensure proper procedures were followed in the sale of shares in Swiss firm Cytos.

Deutsche's buying of Scania stock on the open market, at a time when it was handling the sale of a block of Scania shares bought from Volvo, was not sufficiently transparent.

This, the FSA said, resulted in potential investors not having a "full understanding" about the market for Scania shares.

The FSA also found that relevant information was not shared with senior management or internal compliance units while some details released to investors were "incomplete or inaccurate".

David Maslen, who headed the Deutsche department handling the sale process, has separately been fined £350,000 for his behaviour.

The FSA said that, in his position, Mr Maslen should have been aware of the rules governing market conduct but found no evidence of deliberate wrongdoing on his part.

The fines reflected the seriousness of the offences, the FSA said.

However, it added that it took into account the fact Deutsche Bank immediately reported the matter to the watchdog and subsequently disciplined Mr Maslen, who no longer works for the firm.

"Deutsche's failure is an example of the type of conduct which the FSA will act against in its efforts to improve the overall quality of markets," said Hector Sants, FSA's managing director for wholesale business.

"We expect firms, and their staff, to be aware of the issues that are inherent in all transactions."

Deutsche Bank said it regretted the mistakes made but stressed it had reviewed internal systems and made management changes at the unit.

"The events were isolated instances involving a small number of individuals," it said in a statement.

It added: "Deutsche Bank believes it now has market-leading practices in the relevant areas."

The FSA has sought to crack down on corporate behaviour seen as undermining public confidence in the integrity of financial markets.

Last year, it fined Shell a record £17m for market abuse in relation to its overstatement of oil reserves.

Other Reports on Deutsche Bank
Date	Issue	Company	Report
26th Oct 2006	Other Issue	Deutsche Bank	Mannesmann payouts retrial begins
1st Aug 2006	Other Issue	Deutsche Bank	Bullied City worker wins $1.5m
27th Sep 2004	Fraud Investigation	Deutsche Bank	Deutsche Bank under investigation

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