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Deutsche Bank paid more than € 10 million to Europe’s leading wine exporter to resolve a dispute over the alleged mis-selling of foreign exchange derivatives as the lender nears the end of a internal probe this has already led to the departure of two senior executives.
Late last year, Deutsche sent a larger delegation to Madrid from Frankfurt to negotiate the agreement, which compensated J García-Carrión for the accumulated cash losses caused by the exotic instruments over a six-year period, as people familiar with the matter reported to the Financial Times.
As part of the deal, which has not been previously reported, the bank also apologized for the behavior of its traders and sellers. The settlement decision could add pressure to colleagues Goldman Sachs and BNP Paribas, which face similar allegations from JGC.
Deutsche declined to comment. JGC declined to comment.
The decision was made amid an internal investigation into the German lender known as Project Teal. The investigation began after customers complained that they had been sold sophisticated derivatives that they did not understand, potentially in breach of EU rules designed to protect companies from risky lending.
The FT reported this month the departures of senior executives Louise Kitchen, head of Deutsche’s asset settlement unit, and Jonathan Tinker, co-head of international currency, were linked to the scandal. Two operators who were operationally in charge of the problematic activities have already left the bank.
According to people with knowledge of the situation, the German lender has resolved several other complaints in private and avoided going to court. When the FT first reported on Deutsche’s investigation into the allegations in January, the bank said the potential misconduct affected “a limited number of customers.”
The spiraling losses of some of the forex swaps, which were proposed by Deutsche sellers as a cheaper way to cover currency exposure than traditional exchange rate insurance, pushed some clients into acute financial problems.
JGC has done the same supposed that the French BNP improperly carried out monetary transactions worth billions of euros that resulted in losses of tens of millions.
The FT revealed this month that an internal JGC investigation had found that BNP had conducted more than 8,400 foreign exchange transactions with the company over a five-year period, resulting in cash losses of € 75 million.
The 130-year-old wine producer based in Jumilla, best known for his brand of boxed wines and juices, Don Simón – It is considering legal action after the French bank refused to offset the losses. BNP has said it is complying with all regulatory obligations.
Separately, JGC is suing Goldman Sachs in the London High Court for a partial refund of $ 6.2 million in losses related to exotic currency derivatives. Goldman has maintained that the products were not overly complex for a multinational company with coverage needs and the risks were clear.
The Spanish company has said many of the loss business has been done inappropriately with one of its former executives. He has filed a case in Madrid, accusing the person of carrying out the deals in secret and of covering them up internally by falsifying documents and deceiving the auditors.
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