Deutsche Bank Fires Two as Possible Inquiry Looms

Via NYTimes -

Two executives have been fired at Deutsche Bank as prosecutors consider whether to open a criminal inquiry into surveillance measures conducted against board members and a shareholder advocate.

The executives fired were Wolfram Schmitt, head of investor relations, and Rafael Schenz, German security chief, a person with direct knowledge of the matter said on Tuesday. The person was not authorized to speak on the record and declined to be named.

The bank had ordered an internal review of possible violations of privacy laws in May, after several cases came to light. On Monday, the data protection agency for Hesse, the state where Deutsche Bank is based, said it had forwarded the case to state prosecutors in Frankfurt, after reviewing a preliminary report by the independent law firm Cleary Gottlieb Steen & Hamilton, which had been hired by the bank to conduct the review.

Doris Möeller-Scheu, a prosecutor and spokeswoman for the Frankfurt prosecutor’s office, said the office had received a “very big dossier” and would need about three weeks to decide whether a criminal investigation was warranted.

Ronald Weichert, head of media relations at Deutsche, said the bank could not comment until the report on its internal investigation was finished.

In May, the bank issued a statement saying that it had “learned about possible violations which occurred in past years of the bank’s internal procedures or legal requirements in connection with activities involving the bank’s corporate security department.”

The dismissal of Mr. Schmitt stems from the case of Michael Bohndorf, a shareholder with a history of litigation against the bank who was known to ask critical questions at its shareholder meetings.

After a shareholder’s meeting in 2006, Deutsche Bank hired private investigators to spy on Mr. Bohndorf, posing as vacationers to rent his house in Ibiza and trying to establish a link between him and Leo Kirch, a media tycoon who had waged a legal battle against the bank accusing it of provoking the collapse of some of his companies.

Around that same time, private investigators tested the security measures that Deutsche’s chief operating officer, Hermann-Josef Lamberti, took to protect himself from being tracked and bugged. Detectives tried to plant a GPS device on his car and to smuggle an inactive listening device into his house with a flower delivery.