The U.S. Securities and Exchange Commission is being helped by a whistle-blower in an investigation of Deutsche Bank’s post-crisis mortgage-trading business, according to people with knowledge of the situation.
Bloomberg News reports that the SEC received a whistle-blower complaint alleging that the bank inflated the value of mortgage bonds on its books and masked losses around 2013, said the people, who asked not to be identified because the matter is confidential.
The SEC is probing how the bank valued government-backed mortgage bonds known as Agency pass-through securities that it amassed after the 2007 U.S. housing crisis.
Investigators are looking at positions overseen by Troy Dixon, who ran the bank’s trading for U.S. government-backed mortgage bonds after the crisis until he left the bank in October 2013, people with knowledge of the matter said last month. SEC investigators want to know whether the bank delayed recording losses over an extended period of time on pass-through securities with high coupons, the people said.
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