Deutsche Bank CEO Sewing Faces Lawsuit Over Derivatives Trades

Deutsche Bank CEO Christian Sewing is facing a lawsuit from a former employee, Dario Schiraldi, seeking €178 million in damages. The case revisits a high-profile derivatives probe from over a decade ago and claims Sewing unfairly pinned blame for controversial trades tied to Italian lender Monte dei Paschi di Siena. Deutsche Bank has reviewed its handling of the trades and found no wrongdoing, but the lawsuit puts Sewing under renewed scrutiny of his past decisions.

Deutsche Bank CEO Christian Sewing is facing a lawsuit from a former employee, Dario Schiraldi, seeking €178 million in damages. The case revisits a high-profile derivatives probe from over a decade ago and claims Sewing unfairly pinned blame for controversial trades tied to Italian lender Monte dei Paschi di Siena (MPS). Deutsche Bank has reviewed its handling of the trades and found no wrongdoing, but the lawsuit puts Sewing under renewed scrutiny of his past decisions [1].

The lawsuit, filed in Frankfurt and due to be heard in December, alleges that Sewing, who was the bank’s chief auditor at the time, was involved in a cover-up of management's approval of the trades. Schiraldi, along with five other former Deutsche Bank employees, was initially convicted in 2019 by an Italian court for colluding with MPS to hide losses. However, they were acquitted on appeal in 2022 [2].

Schiraldi claims that the bank's audit, overseen by Sewing, was flawed and that the audit report misrepresented the understanding of the trades within the bank. He argues that the bank's management, including Sewing, tacitly approved the trades but later scapegoated him and his colleagues. According to court filings reviewed by Reuters, Schiraldi's lawyers have obtained millions of internal documents that they claim reveal flaws in the bank's audit process [1].

In its response to the lawsuit, Deutsche Bank has maintained that the audit was thorough and independent, and that executives involved discharged their responsibilities appropriately. The bank has also stated that the claims made in the lawsuit are false and an attempt to generate publicity and damage the reputations of its executives [1].

Sewing, who became CEO in 2018, has since returned Deutsche Bank to profitability and restored its image after years of management churn, legal turmoil, losses, and fines. Despite the lawsuit, he was reappointed to a third term as CEO in March, with the bank playing a key role in Berlin’s “Made for Germany” economic program [2].

References:
[1] https://www.investing.com/news/stock-market-news/deutsche-bank-chief-faces-scrutiny-about-role-in-risky-trades-over-a-decade-ago-4201149
[2] https://financefeeds.com/deutsche-bank-ceo-sewing-drawn-into-lawsuit-over-italian-derivatives-trades/