Deutsche Bank compensates Spanish winemaker over forex scandal
Deutsche Bank paid more than 10 million euros to Europe’s largest wine exporter to settle a dispute over the alleged mis-selling of foreign exchange derivatives, as the lender nears the end of an internal investigation that has already led to the departure of two senior executives.
Late last year, Deutsche sent a high-level delegation to Madrid from Frankfurt to negotiate the settlement, which compensated J García-Carrión for the cumulative cash losses caused by the exotic instruments over a six-year period. people familiar with the matter told the Financial Times.
As part of the deal, which has not been reported before, the bank has also apologized for the behavior of its traders and sellers. The move to settle could add pressure on peers Goldman Sachs and BNP Paribas, who face similar charges from JGC.
Deutsche declined to comment. JGC declined to comment.
The decision came amid an internal investigation at the German lender known as Project Teal. The investigation was launched after clients complained that they were being sold sophisticated derivatives that they did not understand, potentially in violation of EU rules designed to protect companies from subprime loans.
The FT reported this month that the departures of senior executives Louise Kitchen, head of Deutsche’s asset liquidation unit, and Jonathan Tinker, co-head of global forex, were linked to the scandal. Two traders who were in charge of problematic activities have already left the bank.
The German lender settled several other complaints privately and avoided going to court, according to people with knowledge of the situation. When the FT first reported Deutsche’s investigation into the allegations in January, the bank said the potential misconduct affected “a limited number of customers.”
Spiraling losses on some of the currency swaps – which have been touted by Deutsche sellers as a cheaper way to hedge currency exposure than traditional exchange rate insurance – has pushed some clients into serious trouble. financial.
JGC also alleged that the French BNP misdirected billions of euros in currency transactions which resulted in tens of millions of losses.
The FT revealed this month that an internal JGC investigation revealed that BNP had carried out more than 8,400 foreign exchange transactions with the company over a five-year period, causing 75 million euros in cash losses.
The 130-year-old Jumilla-based wine producer – best known for his brand of boxed wine and juice, Don Simón – is considering legal action after the French bank refused to compensate the losses. BNP said it had complied with all regulatory obligations.
In addition, JGC is suing Goldman Sachs in the High Court in London for a partial reimbursement of $ 6.2 million in losses related to exotic currency derivatives. Goldman maintained that the products were not too complex for a multinational company with hedging needs and that the risks were clearly defined.
The Spanish company said many loss-making transactions were inappropriately made with one of its former senior executives. He filed a lawsuit in Madrid, accusing the person of conducting transactions in secret and covering them up internally by forging documents and misleading auditors.