Reuters: Deutsche Bank Rogue Trader Dismissed After Sarbanes-Oxley Complaint

June 27, 2011 - Comments Off

According to a report filed by Reuters journalist Matthew Goldstein, Deutsche Bank terminated derivatives trader Alex Bernand in 2009 on the heels of a SOX whistleblower complaint  of “substantive trading anomalies.”  Prompted by concerns of former trader Matthew Simpson, Deutsche conducted an internal inquiry to discover Bernand had engaged in “improper trading” in a personal brokerage account.  Until last week, the firing had been kept under wraps, along with an SEC investigation opened May 2010 into allegations that assets in a derivatives portfolio Bernand managed were incorrectly valued so as to hide trading losses.  

“Simpson did the right thing by coming forward,” stated David J. Marshall, an attorney of Katz, Marshall and Banks, who leads the firm’s whistleblower practice. “While financial institutions use derivatives to insure against risks to their profits, this poorly regulated market has come with a billion dollar price tag for American taxpayers during and after the financial crisis.  When banks ignore internal practices that jeopardize our economy’s stability, Sarbanes-Oxley is the whistleblower’s insurance policy.”

Simpson first reported his suspicions of trading violations to Deutsche Bank’s compliance department and later filed his whistleblower complaint when the bank allegedly retaliated in February 2010 by denying him a promotion and severely reducing his work responsibilities.  In January 2011,  Deutsche settled Simpson’s complaint, paying him $900,000 and offering  a director position.  A year after the SEC initiated its inquiry, Deutsche continues to deny any wrongdoing in the matter.

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