It has been tipped to me on background, but I am still trying to confirm it, that Deutsche Bank has Interpol agents in its C-suite combing over its records on a host of financial fraud charges and that this is what is behind the cratering of the stock.
The probe dates back to DB’s chairman Josef Ackermann’s tenure, which led to his abrupt resignation three years ago and that the investigation has exploded into various areas of the bank, including but not limited to Libor, gold and silver price rigging and gouging of Greek banks along with a host of other frauds already in the news from the likes of HSBC and Credit Suisse.
While the cover story on Ackermann’s resignation was the result of the suicide of Pierre Wauthier, the 53-year old CFO of Zurich Insurance, which DB owned, sources tell me Wauthier was worried about the beginning of the investigation and Ackermann pushed him too hard to allegedly cover up the mess. Another source suggests that Wauthier was about to blow the whistle on the bank and that’s how he came to his demise.
Looking back, the sources say William Broeksmit’s suicide in January 2014 can also be laid at the feet of this criminal probe. Broeksmit was a senior risk officer at the bank. The back story on his death was attributed to his being passed over for a promotion to Chief Risk Officer by the German Finance regulator, BaFin, for lack of experience.
Reportedly Broeksmit was “anxious about various authorities investigating areas of the bank where he worked,” according to written evidence from his psychologist, given at an inquest at London’s Royal Courts of Justice, after his death. Broeksmit was about to be brought in as a cooperating witness at the time of his passing, according to sources.
Sources also point to the criminal probe as being the reason behind Anshu Jain stepping down last year as co-CEO and fellow CEO Jürgen Fitschen leaving soon after that to be replaced by John Cryan, a former UBS finance chief.
I am told that the cratering stock price over the last 6 months was a result of the investigation leaking out into the markets and that the liquidity question was put forth to get people off the trail of the full-blown criminal probe, which would shut the bank down as EU regulators would be forced to charge DB as a criminal operation.
Of course no one with any knowledge will comment on or off the record on this.
Fed chief Janet Yellen is on Capitol Hill Wednesday to start to days of testimony to Congress on the state of the US and world economy.
It has been reported that her prepared remarks will be identical to both House and Senate Finance committees, which makes sense since there is little more to say than “Oops.”
But don’t expect a headline to come out of these Q&As with Congress. If the Fed is clueless, the Senators and Representatives as even more in the dark on monetary policy.
Perhaps one will ask if it was proper to raise rates in Dec. and Yellen will say that 84 months of unprecedented ZIRP (zero-interest rate policy) was enough and that the US was seeing growth.
That will be your headline from day one. Yawn.