(Bloomberg)--Deutsche Bank AG, Europes biggest investment bank by revenue, will review whether to punish senior employees including Alan Cloete for their roles in the interest-rate rigging scandal, according to a person with knowledge of the matter.
Deutsche Banks supervisory board will discuss punishments early in the week of Jan. 27, said the person, who asked not to be named as the meeting isnt public. These include firing or disciplining Cloete -- who oversaw traders alleged to have sought to rig benchmark interest rates -- and employees responsible for how the bank dealt with the scandal, the person said.
Regina Schueller, a spokeswoman for Deutsche Bank, declined to comment on what may be discussed at the board meeting. The bank is cooperating with regulatory authorities, she said. Cloete didnt respond to an e-mail seeking comment. Schueller declined to comment on his behalf.
Regulators around the world are investigating whether more than a dozen firms colluded to rig benchmark interest rates such as the London interbank offered rate, or Libor, for their own profit or to mask their true cost of borrowing. The global penalties for rate-rigging reached $6 billion last month after the European Union fined Deutsche Bank and five other companies a record 1.7 billion euros ($2.3 billion).
Cloete, who built Deutsche Banks structured credit finance business, leads operations in the Asia-Pacific region with former India chief Gunit Chadha.
Before moving to Hong Kong, Cloete was head of foreign exchange and global finance while Anshu Jain was head of the corporate and investment bank unit. He was a potential candidate to succeed Jain as head of the investment banking and trading unit when Jain became co-chief executive officer with Juergen Fitschen in June 2012, people with knowledge of the matter said in 2011.
At 49, Cloete was named to the group executive committee, according to a March 2012 statement. Thats the highest-ranking body after the management board and his nomination came as Jain promoted bankers he had worked closely with.
Cloete informed Jain of potential irregularities related to Libor in June 2011, the bank said in May.
Handelsblatt reported the boards deliberations today.
The company fired two traders at the end of 2011 for trying to rig rates and five employees last February for what it said was inappropriate communication with colleagues on rate submissions. Four of the fired won a wrongful dismissal lawsuit in September and recovered back pay after telling a labor court their bonuses were reduced as an initial sanction.
They testified before the Frankfurt court that Cloete said they would be compensated once the situation had calmed down. Deutsche Bank disputes their account and has appealed the ruling.
Deutsche Bank is due to report fourth-quarter earnings and hold a press conference on Jan. 29. The supervisory board will also discuss the results, according to the person.
Register or login for access to this item and much more
All Financial Planning content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access