Deutsche Bank conducting internal investigation on banking product sale
Deutsche Bank AG is conducting an internal investigation following a Financial Times report describing bank employees who sold investment banking products to clients, breaching EU rules and then collaborated with employees to share in the profits.
According to the report, Deutsche Bank began looking into the issue last year following numerous complaints by clients, naming the investigation Project Teal. The bank discovered certain clients had been incorrectly categorized as client firms under the Markets in Financial Instruments Directive rules, which require banks to separate their clients by levels of financial sophistication such as retail investor, professional investor or counterparty, which means another bank or financial institution.
Clients complained employees knowingly sold unsuited products and relied on the fact that the clients didn't understand the risks they were taking. The investigation indicated this to be a pattern of misconduct rather than an isolated occurrence.