It's tough at the top.
Bloomberg reports that Deutsche Bank co-Chief Executive Officer Juergen Fitschen and Stefan Krause, the firm’s chief financial officer, are subjects of a tax probe involving the sale of carbon-emission certificates that led to five arrests and police raids on the lender’s Frankfurt offices.
Fitschen and Krause’s approval of value-added tax statements for 2009 is being reviewed by prosecutors, Deutsche Bank said Wednesday in an e-mailed statement. Any errors in the document were corrected in a timely manner, the bank said. Prosecutors say the correction was too late, the lender said.
The bank’s headquarters were searched and prosecutors are investigating 25 employees, Guenter Wittig, a spokesman for the Frankfurt General Prosecutor, said in a statement. Five workers were arrested over obstruction of justice and money laundering allegations, he said. He declined to identify any suspects.
'There’s suspicion the bank employees withheld evidence from the authorities and failed to report potential money laundering', Wittig said, in reference to the obstruction of justice portion of the case. The bank was previously raided in 2010 as part of the case.
Global investment banks are the subject of probes from Japan to Canada as regulators intensify their scrutiny of the industry. At Deutsche Bank, the CO2 probe adds to subpoenas and litigation stretching from alleged rigging of interbank lending rates to claims the bank misrepresented products tied to U.S. mortgages.
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image: © Lisamarie Babik