The Korea Herald


Deutsche Bank New York, Hong Kong staff summoned over stock manipulation

By 김소현

Published : April 25, 2011 - 21:51

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South Korean prosecutors have summoned about a dozen employees of Deutsche Bank's New York and Hong Kong offices for questioning over alleged stock manipulation that forced the key index to nosedive last year, officials said Monday.

The Seoul Central District Prosecutors' Office believes that employees at the German bank's overseas bureaus gave orders to the Seoul unit to place massive sell orders in the closing minutes of trading on Nov. 11, the expiry date of stock index options, a prosecution official said. The benchmark index closed 2.7 percent lower on that day.

The summoned employees include ranking officials and four of them are suspected to have been actively involved in the trading, according to the official. The questioning will start later this week and run through early next month. 

It is unusual for a group of foreign bank employees to face questioning at a Seoul prosecutors' office.

Deutsche Bank's Seoul branch has been investigated by prosecutors over allegedly having taken profits by manipulating the stock market price. Prosecutors confiscated stock trade documents and computer files of three Seoul branch offices last month.

The prosecutors plan to question employees as to whether the trading was pre-planned, whether Deutsche Bank's headquarters was involved in the Nov. 11 trading and how much profit they locked in, according to the source.

After questioning the employees, they will determine if it is necessary to investigate the bank's headquarters in Frankfurt, Germany, the source added.

In February, South Korea's stock market operator fined the local brokerage unit of Deutsche Bank a record 1 billion won ($910,000) for violating trading rules. Since April, Deutsche Securities Korea has been prohibited from trading derivatives as punishment. (Yonhap News)