Bloomberg News

Deutsche Bank Says Facing Lawsuit Over Yen Libor, Derivatives

July 31, 2012

Deutsche Bank AG (DBK), one of at least a dozen banks being probed over allegations of interest-rate rigging, is being sued over claims it manipulated the Yen Libor rate and the price of derivatives tied to the Euroyen benchmark.

The suit was filed in April in the U.S. by parties the bank didn’t identify who alleges Deutsche Bank was one of a group of banks that rigged the Yen London interbank offered rate, the Tokyo Interbank Offered Rate for yen held overseas and the price of Euroyen-based derivatives, Frankfurt-based Deutsche Bank said in a statement today.

The suit is one of several potential class actions filed against the bank in the U.S. The other suits relate to allegations the bank manipulated U.S. dollar Libor and the prices of derivatives tied to that rate. The lender filed in June to dismiss those lawsuits, which have been consolidated for pre-trial purposes in federal court in New York.

Banks are the target of litigation as regulators probe firms over clams they artificially understated their cost of borrowing or allowed traders to manipulate interest rates and profit from bets on interest-rate swaps. Barclays Plc (BARC), Britain’s second-biggest bank by assets, was fined a record 290 million pounds ($456 million) last month for rigging the London interbank offered rate.

Libor is determined by 18 banks’ daily estimates of how much it would cost them to borrow from one another for different time frames and in different currencies. The benchmark rate for more than $360 trillion of securities, Libor influences the cost of securities from mortgages to derivatives.

Internal Probe

Deutsche Bank reiterated today it’s co-operating with regulators and said an internal investigation has so far cleared current and former management board members of wrongdoing.

“A limited number of employees, acting on their own initiative, engaged in conduct that falls short of the Bank’s standards, and action has been taken accordingly,” Paul Achleitner, the Frankfurt-based company’s supervisory board chairman, said in a letter to employees today. He didn’t give further details about the employees or any disciplinary actions.

To contact the reporters on this story: Nicholas Comfort in Frankfurt at ncomfort1@bloomberg.net; Annette Weisbach in Frankfurt at aweisbach1@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net


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