Deutsche Bank Raids Reached Senior Managers

(Bloomberg) -- A second day of police raids over suspected money laundering at Deutsche Bank AG included searches of the offices of each of the eight members of the management board, according to a person familiar with the matter.

With the bank’s leaders now drawn closer to the probe, its shares tumbled to a record low. Deutsche Bank’s supervisory board is due to convene on Tuesday for a regular meeting, and the bank’s latest gyrations are likely to be top of the agenda.

The latest developments show that Christian Sewing, the bank’s fourth CEO since 2015, is trapped in the same feedback loop of negative news, rising funding costs and declining revenue that foiled his predecessor, John Cryan.

Even after months of relentless travel and endless meetings with staff and clients, Sewing, a 48-year-old Deutsche Bank lifer, has been unable to break out of what Chief Financial Officer James von Moltke called a “vicious circle.”

Sewing is pulling out all the stops to escape that circle. He has already replaced two members of the management board, former Chief Operating Officer Kim Hammonds and the head of asset management, Nicolas Moreau; Chief Regulatory Officer Sylvie Matherat may be the next to go, people familiar with the matter have said.

The police raid on Thursday and Friday was targeting two suspects identified by their age and an unspecified number of other suspects, the prosecutors said. One of the two suspects works in the bank’s anti-financial crime unit, a person familiar with the matter said. It was headed by Philippe Vollot until this summer and now is led by Stephan Wilken. The unit head ultimately reports to Matherat.

The other suspect identified by age works in the private wealth unit, according to the person. It’s led by Fabrizio Campelli and it’s part of Deutsche Bank’s private and commercial bank that is headed by management board member Frank Strauss. It was led by Sewing from 2015-2018 before he was appointed CEO.

Searches don’t necessarily mean that prosecutors have evidence against a person whose office is being raided. They can raid homes or offices of people who aren’t implicated if there’s reason to believe document or other evidence relevant to the case may be found there. In probes of corporate crimes, investigators generally check whether top managers knew about the alleged wrongdoing or did enough to prevent it.

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