Deutsche Bank has reached a $17.5m settlement with Massachusetts regulators who said the firm’s employees didn’t disclose conflicts of interest tied to collateralized debt obligations before the financial crisis.
Bloomberg reports that the bank’s securities unit failed to ensure that buyers of a CDO known as Carina knew a proprietary trading group at the firm and a hedge fund had played a role in structuring the product in 2006, Secretary of the Commonwealth William Galvin said in a consent order.
The group and fund intended to bet against part of the CDO or similar debt, he said. Galvin faulted the bank’s unit, known as DBSI, for supervisory lapses.
In the meantime, Reuters reports that Deutsche Bank said on Wednesday damage claims filed by Italy's Monte dei Paschi di Siena over a derivative trade were 'entirely without merit', vowing to defend itself vigorously.
Monte dei Paschi seeks some $646m in damages.