Deutsche Bank compensates Spanish trader for forex scandal

Deutsche Bank has paid more than € 10 million to Europe’s largest wine exporter to resolve a dispute over the alleged incorrect sale of foreign exchange derivatives, when the lender is nearing the end of a internal probe which has already led to the departure of two senior executives.

Late last year Deutsche sent a senior delegation to Madrid from Frankfurt to negotiate the settlement, which compensated J García-Carrión for the cumulative cash losses caused by exotic instruments over a six-year period, they said. to the Financial Times people know the deal.

Under the agreement, which was not reported earlier, the bank also apologized for the behavior of its traders and sellers. The decision to establish could put pressure on peers Goldman Sachs and BNP Paribas, who face similar charges 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 probe was launched after customers complained of being sold sophisticated derivative products that they did not understand, potentially in breach of EU rules aimed at protecting companies from risky loans.

In FT reported this month the departures of former executives Louise Kitchen, head of Deutsche’s asset liquidation unit, and Jonathan Tinker, co-head of world currencies, were linked to the scandal. Two traders who were operationally in charge of the troubled business have already left the bank.

The German lender settled several other private complaints and avoided going to court, according to people familiar with the situation. When the FT first reported on Deutsche’s probe in the indictment in January, the bank said the potential misconduct affected “a limited number of customers.”

Spiral losses for some of the forex swaps – which have been presented by Deutsche sellers as a more economical way to cover currency exposure than traditional foreign exchange insurance – have pushed some clients into acute financial problems. .

JGC has it too accused that France’s BNP has improperly conducted billions of euros in foreign exchange transactions that have led to tens of millions of losses.

The FT revealed this month that an internal investigation at JGC found that BNP had made 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 wine producer, based in Jumilla, is best known for its canned and juicy wine brand, Don Simone – Think about legal action after the French bank refused to provide compensation for the losses. BNP said it has complied with all regulatory obligations.

Separately, JGC is suing Goldman Sachs in London High Court 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 that needs coverage and the risks were highlighted.

The Spanish company said many of the loss-making deals were done improperly with one of its former executives. He brought a case to Madrid, accusing the person of conducting business in secret and of covering it up internally by falsifying misleading documents and checks.