Hong Kong arrests Deutsche Bank staff

15th April 2011, Comments 0 comments

Hong Kong's graft watchdog is investigating a major fraudulent trading case after arresting 11 people, including two traders at German financial services giant Deutsche Bank.

The city's graft agency, the Independent Commission Against Corruption (ICAC), said it had made the arrests after launching an operation on Tuesday following a corruption complaint.

The two from Deutsche Bank are suspected of conspiring to accept payments from an investor and others for quoting favourable prices to them in their trading of the bank's derivative warrants, the corruption agency said.

The profits made by those involved in the case amounted to HK$10 million ($1.3 million), according to local media reports.

"Deutsche Bank was advised by the ICAC of the arrest of two employees, both warrants traders in Hong Kong," spokesman Michael West said in a statement Friday.

"The two traders were immediately placed on leave from the bank until the matter is resolved. Should the allegations be found to be true they will be held fully accountable."

The bank added that it was "not under investigation and it is fully assisting ICAC with their enquiries".

Earlier Friday, the bank had declined to confirm the pair's arrest, saying its warrants business in Hong Kong was "operating normally and we are fully committed to meeting client market requirements."

The ICAC said the suspects arrested in "Operation Leap Over" include two licensed representatives of a securities firm, a stock investor and six others.

They are also being probed for conspiring to defraud the bank and the public "by creating a false or misleading appearance of active trading in the derivative warrants issued by the bank", the commission said.

"The investigation is ongoing and we cannot disclose any further information at this point," an ICAC spokeswoman told AFP Friday.

The Securities and Futures Commission, the city's regulator for financial markets, also declined comment.

© 2011 AFP

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