Deutsche Bank has launched an investigation into whether confidential client data were compromised after it failed to deactivate the accounts of dozens of fired staff when it closed its global equities business earlier this month.
Around 50 traders in the London and New York offices were still able to access the bank’s systems and their Deutsche Banmails for weeks after the first round of lay-offs started on July 8, according
to people briefed on the compliance blunder. One equity salesperson sent 450 messages via remote access after she was let go.
The failure comes at a sensitive time for the German lender, which faces a steep task to convince investors it can execute one of the most radical bank restructurings since the financial crisis after multiple failed attempts at an overhaul in recent years.
Christian Sewing, chief executive, is cutting 18,000 jobs and hiving off €288bn of assets as the bank abandons its 20-year attempt to break into the top ranks of Wall Street.
Deutsche’s global head of compliance surveillance, Jeremy Kirk, is leading the investigation, which is examining whether price-sensitive data were accessed or if there had been any collusion between current staff and those made redundant.
“Access to trading systems was turned off immediately for employees being put at risk of redundancy,” the bank said. “A small number of employees continued to have access to their work emails through personal devices for a limited period.
“We have reviewed nearly all emails sent and have so far found no evidence of any price sensitive information being communicated or of any other wrongdoing,” he added.
“Access to work emails has now been fully revoked.” One of the people with knowledge of the compliance mishap said: “A lot of the decisions seem to have been made on the hoof, things
haven’t been thought through properly, which is causing a huge compliance headache.” The person added: “We should have been more aware ahead of time and brought in more tech people to cope.”
The equities traders are part of the 900 staff already let go of a planned total of 18,000 — around a fifth of the workforce. The company has also created bad bank to dispose of toxic
or unwanted assets.
As part of the overhaul, Deutsche has committed to spending €4bn to improve its controls over the next three years and will combine its risk, compliance and anti-financial crime functions in an attempt to reduce errors.
