Deutsche Bank Facing GBP6.3 Million Fine

by Robin Pilgrim, LawAndTax-News.com, London

14 April 2006

The UK's Financial Services Authority (FSA) on Tuesday announced that it has imposed a penalty of GBP6,363,643 on Deutsche Bank AG, for breaching FSA Principle 5 by failing to observe proper standards of market conduct, and Principle 2, by failing to conduct its business with due skill, care and diligence.

These breaches arose from two separate transactions conducted by Deutsche during March 2004. The first was in relation to a book build (a way in which an investment bank may try to sell a large parcel of shares to several investors at one time) in Scania AB B shares, while the second involved the stabilisation of Cytos Biotechnology AG shares.

The FSA also revealed that it has imposed a financial penalty of GBP350,000 on David Maslen, Deutsche's former Head of European Cash Trading, for being knowingly concerned in the failure to observe proper standards of market conduct in the Scania transaction.

Hector Sants, FSA Managing Director for Wholesale Business explained that:

"The FSA has previously expressed a determination to act against institutional market misconduct and Deutsche's failure is an example of the type of conduct which the FSA will act against in its efforts to improve the overall quality of markets.

"The market rightly expects that firms involved in running book build transactions ensure that they observe proper standards of market conduct and act with due skill, care and diligence in their activities during these transactions.

"We expect firms, and their staff, to be aware of the issues that are inherent in all transactions, and to ensure that they take steps to manage those appropriately. This is fundamental to maintaining efficient, orderly and clean markets."

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