FRANKFURT (Reuters) - Deutsche Bank’s (DBKGn.DE) supervisory board is seeking answers from management about claims alleging the lender failed to recognize billions of euros in unrealized losses, two people familiar with the matter said on Friday.
The general nature of the allegations about disagreements over valuation of credit derivatives were known, a source familiar with the supervisory board’s thinking said.
However, news reports alleging the bank failed to recognize up to $12 billion of unrealized losses during the financial crisis raised “some new questions about the magnitude,” he added.
The topic of valuations will be discussed at the next supervisory board meeting, another person familiar with the supervisory board’s thinking said.
Deutsche Bank declined to comment.
On Thursday Law firm Labaton Sucharow LLP said Eric Ben-Artzi, a former quantitative risk analyst at Deutsche, used a whistleblower program to tell the U.S. Securities and Exchange Commission (SEC) the bank failed to report the value of its credit derivatives portfolio correctly from 2007 through 2010.
The Financial Times reported on Thursday that three former Deutsche Bank employees had filed complaints with the U.S. securities regulators claiming the bank failed to recognize up to $12 billion of unrealized losses during the financial crisis.
Deutsche Bank said it was cooperating with the SEC and dismissed the allegations.
Reporting by Edward Taylor and Arno Schuetze