Regulator said probing Deutsche Bank over expenses

Japan's securities market watchdog is investigating whether Deutsche Bank employees provided excessive entertainment to Japanese pension fund executives in breach of regulations, sources with knowledge of the matter said.

Reuters News reports that the Securities and Exchange Surveillance Commission (SESC) found evidence of potential infractions during a regular audit of Deutsche Securities Inc, the German bank's investment banking arm in Tokyo, said the sources, who spoke on condition they not be identified because the investigation is ongoing.

Deutsche had already started its own investigation into the matter before the SESC began its audit in May, and has stopped marketing directly to such pension funds as part of a review of its sales and compliance practices, sources said.

Details of the alleged expenses, including the amounts spent and the identities of the pension fund executives, were not immediately available. The sources said the expense reports of a handful of Deutsche employees who market products and strategies to pension funds are being scrutinised as part of the probe.

The SESC has put employee pension funds under the spotlight since Tokyo-based money manager AIJ Investment Advisors was shut down by regulators and its top executive arrested for defrauding pensioners out of more than $1bn in 2012.

The scandal triggered an industry-wide review by regulators of companies that manage pension money that is continuing.

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Japan regulator probing Deutsche Bank entertainment of pension clients - sources

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images: © Lisamarie Babik, © steenslag

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