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Wed, Jul 22, 2009 - Page 10 News List

Deutsche Bank fires two over spy case

‘OBVIOUSLY WENT TOO FAR’: People with knowledge of the situation said the two were fired for planning surveillance of a shareholder who had previously sued the bank


Deutsche Bank AG, Germany’s biggest bank, fired two employees for their alleged role in a spying scandal being examined by German prosecutors, two people with knowledge of the situation said.

The Frankfurt-based bank dismissed its German head of corporate security and its investor relations chief for planning the surveillance of Michael Bohndorf, a shareholder who has previously sued Deutsche Bank, said the people, who declined to be identified because the matter hasn’t been publicly disclosed.

Frankfurt prosecutors are examining whether to open a criminal probe into possible privacy violations at the bank. An agency in Darmstadt, Germany, that handles data protection issues referred the matter to prosecutors after an investigation of the bank’s corporate security department and private detectives determined there were grounds to suspect breaches of privacy laws, regional council spokesman Gerhard Mueller said on Monday.

“Deutsche Bank obviously went too far” in its surveillance, said Wolfgang Gerke, president of the Bavarian Center of Finance in Munich. “But we need to wait for more information before making a final judgment. It’s positive that they took immediate action after the latest findings.”

The company said on May 22 it had uncovered possible violations in its corporate security department. The bank, which also faces a probe by German financial regulator BaFin, hired a law firm to carry out an investigation into the matter. The initial findings of the firm, Cleary, Gottlieb, Steen & Hamilton, implicated the two employees, one of the people said.

Germany has been hit by data scandals at state-owned railroad Deutsche Bahn AG and Deutsche Telekom AG, Europe’s biggest phone company. Berlin-based Deutsche Bahn earlier this year admitted reviewing personal data relating to 173,000 workers in 2002 and 2003 as part of an anti-­corruption investigation.

The data agency in Darmstadt told the bank that two cases are being examined to determine whether an “administrative offense” was committed, and the entire matter was handed over to prosecutors, Deutsche Bank spokesman Ronald Weichert said on Monday. The bank is cooperating with all authorities, he said. Frankfurt prosecutors will need “some time” to examine the council’s findings, spokeswoman Doris Moeller-Scheu said.

The probe is examining Deutsche Bank’s potential spying by private detective firms on executives including chief operating officer Hermann-Josef Lamberti, an employee representative on the supervisory board, and an investor, two people close to the matter said last month.

Deutsche Bank said earlier this month it apologized to Gerald Herrmann, a former member of the bank’s supervisory board and labor representative, for hiring a private detective to monitor him because he was suspected of leaking earnings to the press eight years ago.

Deutsche Bank chairman Clemens Boersig may have asked the investor relations chief to look into Bohndorf and check whether he was working in cooperation with German businessman Leo Kirch after he and Kirch’s lawyers asked “critical questions” at the bank’s annual general meeting in June 2006, magazine Der Spiegel reported. Spiegel also first reported the firings of the two executives.

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