By Ulrike Dauer
FRANKFURT--Deutsche Bank AG (DB) is appealing a ruling by a
Frankfurt labor court that the bank wrongfully dismissed and had to
reinstate four money-market traders whom it had fired as part of an
internal probe into alleged benchmark interest rate
manipulation.
A spokesman for Deutsche Bank said Wednesday the bank has filed
the appeal. The appeals labor court, the Landesarbeitsgericht
Frankfurt, received the appeal Nov. 15, a spokesman for the court
said.
The court spokesman said a hearing of the appeal wouldn't take
place before June, at the earliest. All traders remain reinstated
in the workplace during the appeal proceedings.
The bank had to file the appeal within four weeks of receiving
the written judgment by the lower labor court, under German law. It
has another four weeks to file a legal rationale for the
appeal.
The lower Frankfurt labor court ruled in September that the
dismissals weren't justified as the bank didn't have proper
internal rules and controls in place and didn't ensure adequate
separation of rate submitting and derivatives trading. It also
ruled that all four individuals were entitled to receive
outstanding remuneration worth almost 2 million euros ($2.65
million) combined, in addition to getting their jobs back. Three
traders submitted quotes for Euro Interbank Offered Rates, or
Euribor, and one for Swiss Franc London Interbank Offered
Rates.
In February, the bank had suspended five money-market traders in
Frankfurt, after an internal probe into potential manipulation of
benchmark interbank lending rates. The employees were dismissed and
their unvested compensation was clawed back. One of the five
individuals reached a settlement with the bank, but the other four
sued the bank for reinstatement of their contracts.
In addition to the five, the bank had in 2011 suspended two
traders suspected of manipulating the London interbank offered
rate, known as Libor.
Within the next month, European Union regulators are expected to
announce hefty fines against six global banks, including Deutsche
Bank, related to alleged attempts to rig benchmark interest rates
such as Libor and Euribor, industry officials briefed on the
discussions told The Wall Street Journal earlier this month.
A Deutsche Bank spokesman pointed to the bank's latest quarterly
report for comment on the Journal article. In the report, released
at the end of October, Deutsche Bank says it has received subpoenas
and requests for information from regulators in Europe, North
America and Asia Pacific regarding probes into alleged manipulation
of benchmark rates. The bank is cooperating with the
investigations, which could result in significant financial
penalties and other consequences, it says.
Since June 2012, U.S. and U.K. regulators have fined five
financial institutions--Barclays PLC (BCS), UBS AG (UBS), Royal
Bank of Scotland Group PLC (RBS), ICAP PLC (IAP.LN) and
Rabobank--for a total of more than $3.5 billion related to the
alleged manipulation of benchmark interbank lending rates.
Contracts and loans worth trillions of euros are based on
benchmark interbank lending rates.
--David Enrich contributed to this article.
Write to Ulrike Dauer at ulrike.dauer@wsj.com; Twitter:
@UlrikeDauer_
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