German politicians called for regulators to investigate claims by a former employee alleging Deutsche Bank AG had failed to recognise billions of euros in unrealised losses. Law firm Labaton Sucharow LLP said Eric Ben-Artzi, a former quantitative risk analyst at Deutsche, used a whistleblower programme 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.
Deutsche Bank said the allegations were unfounded but lawmakers called for German financial regulator BaFin to probe the allegations.
"What is now needed is the financial regulator to quickly and comprehensively uncover whether these allegations have merit. This is also in the interest of Deutsche Bank itself," said Gerhard Schick, a Green party parliamentarian.
The allegations highlight the opaque nature of bank valuation models, Schick said, adding the financial crisis could not be solved as long as banks were relied
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