Deutsche Bank Probes Misselling of Investment Bank Products: FT

The Deutsche Bank AG logo sits on the bank's headquarters in Frankfurt, Germany, on Wednesday, July 25, 2018. Deutsche Bank vowed to maintain its position in fixed-income trading after recording its weakest second quarter in that business since the global financial crisis, as Chief Executive Officer Christian Sewing accelerates the lender’s turnaround effort. Photographer: Alex Kraus/Bloomberg
The Deutsche Bank AG logo sits on the bank's headquarters in Frankfurt, Germany, on Wednesday, July 25, 2018. Deutsche Bank vowed to maintain its position in fixed-income trading after recording its weakest second quarter in that business since the global financial crisis, as Chief Executive Officer Christian Sewing accelerates the lender’s turnaround effort. Photographer: Alex Kraus/Bloomberg

(Bloomberg) -- Deutsche Bank is probing whether its staff sold investment banking products to clients that breached EU rules -- and then colluded with individuals to split the profits, the Financial Times reported, citing unidentified people.

The internal investigation was prompted by client complaints last year, the newspaper reported, adding that the inquiry originally focused on a desk in Spain that sells hedges, swaps and derivatives.

The bank believes some of its employees knowingly sold unsuited products to customers who may not have been able to understand and accept the risks they were taking, the FT said, citing the people.

The audit, which is called Project Teal, found the bank had wrongly categorized client firms under the Markets in Financial Instruments Directive rules, which require banks to separate their clients by levels of financial sophistication, the FT said.