Deutsche Bank begins an investigation into the involvement of some customers

(Reuters) – Deutsche Bank AG said Sunday it has begun an investigation into involvement with some customers after the Financial Times previously reported that the German lender was investigating the alleged mis-selling of investment banking products.

“We have investigated our involvement with a limited number of customers. We cannot comment on the details of the investigation until it is completed, ”a Deutsche Bank spokesman said in an emailed statement on Sunday.

The Financial Times reported that the lender sought if its staff were mis-selling advanced investment banking products to clients in violation of European Union rules and then colluded with individuals within these companies to share the profits.

The internal investigation was triggered last year by complaints from clients, the paper reported, citing people familiar with the process, adding that the investigation initially focused on the agency in Spain, which sold hedges, swaps, derivatives and other financial sells products.

An audit found that the bank falsely categorized client firms under the Markets in Financial Instruments Directive (Mifid) rules, which require banks to segregate their clients based on financial sophistication, the paper said.

Sources told the paper that the lender believes some of its staff have knowingly sold inappropriate or inappropriate products to customers who could not understand and bear the risk they were taking with these views.

The probe, dubbed Project Teal, is also investigating allegations that there was collusion between the employees of the German bank and the staff among some of the customers who bought the inappropriate products.

The scope of the investigation was then expanded to the rest of Europe, but it was assumed that only customers in Spain and Portugal were affected, a source told FT.

The investigation is coming to a close and the bank will soon have to provide final information to regulators, the paper said, adding that the bank’s main regulators, BaFin and the European Central Bank, have been informed.