Deutsche Bank Investigating Staff For Breach of MiFid Rules and Collusion – Report
Deutsche Bank has launched an internal investigation into an alleged breach of EU rules and collusion between bank employees and clients, according to the Financial Times.
The investigation, called Project Teal, found that Deutsche Bank (DB) mis-categorized client firms under MiFid (Markets in Financial Instruments Directive) rules, and that some of its staff knowingly sold inappropriate products to unsophisticated clients who might not have understood the ramifications, the Financial Times reports.
Following client complaints last year, Deutsche initially focused on the desk in Spain, but later expanded the investigation to the rest of Europe. An unnamed source told the Financial Times it is now believed that only clients in Spain and Portugal were affected.
The Financial Times has also discovered that Deutsche is looking into allegations that collusion between staff at the bank and its clients might have occurred, and that proceeds of the transactions were shared. The investigation is coming to an end and Deutsche will soon have to make disclosures to its regulators about its findings and proposed disciplinary actions moving forward. (See DB stock analysis on TipRanks)
Credit Suisse analyst Jon Peace reiterated his Sell rating on Deutsche last week, setting his price target at $8.52. This implies downside potential of around 22% from current levels.
Deutsche will release its earnings results for the first quarter of 2021 on February 4, and Peace expects the bank to post earnings per share (EPS) of $0.14.
Consensus among analysts is a Moderate Sell with 1 Buy, 7 Holds and 8 Sells. The average price target of $10.19 suggests downside potential of around 6% over the next 12 months.
Deutsche receives a Smart Score of 3 out of 10 on TipRanks, which implies that the company has historically underperformed the market.
Dada Group Joins Forces With Local Retailers to Combat Latest COVID-19 Outbreak
Regions Financial’s 4Q Profit Jumps 61%
Wabtec Secures Order From Singapore Mass Transit