Friday, October 30, 2020

Four More Banks Named in Deutsche Bank Bribery Lawsuit in London

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The middleman who confessed to paying bribes over trades he helped arrange between Deutsche Bank AG and a Dutch housing firm said he was also getting commission payments from other major lenders, including Barclays Plc, Citigroup Inc., Societe Generale SA and BNP Paribas SA.

Arjan Greeven — who’s at the center of a London lawsuit that turns on what Deutsche Bank knew about the bribes — said the other firms would also pay commissions to his company on trades they carried out for Stichting Vestia.

Until 2010, he paid Marcel De Vries, Vestia’s treasury and control manager, a share of those fees “on all Vestia trades with all of the banks where I was involved in the Vestia/bank relationship,” he said in filings. Greeven and De Vries — who was in charge of Vestia’s derivatives trading — were convicted of bribery in the Netherlands last year. Both are appealing.

Deutsche Bank said it knew nothing about Greeven and De Vries’ “secret arrangements” and that Greeven’s firm, First in Finance Alternatives, seemed to be a legitimate intermediary. Citigroup, Barclays, Societe Generale and BNP Paribas declined to comment. Those banks aren’t accused of knowing that Greeven’s company was passing on fees to De Vries.

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The case sheds light on the use of intermediaries in the years before the U.K. introduced tougher anti-bribery rules in 2011. Greeven’s company was paid fees by as many as six other lenders over derivative trades with Vestia, and he even complained that other banks paid him higher fees, Deutsche Bank said in its filings for the lawsuit.

Vestia almost collapsed after losing more than 2 billion euros ($2.2 billion) on derivatives trades that soured, of which it says a “substantial part” came from trading with Deutsche Bank. It’s suing in a bid to recoup some of the money, saying some of those derivatives transactions were “flawed” because of the bribes. The other banks aren’t parties to the case.

“Vestia’s allegations are without basis and we deny them in the strongest terms,” a Deutsche Bank spokeswoman said.

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Deutsche Bank paid 3.5 million euros in fees to Greeven’s firm, known as FIFA, Vestia said. Greeven would pay half of his gross earnings on trades between Vestia and Deutsche Bank to De Vries, and De Vries would call Greeven to ask how much commission he’d made.

“He did the same thing so far as concerned the other banks that we were dealing with,” which included Citi, Barclays and Societe Generale and BNP Paribas, Greeven said.

The alleged involvement of other banks is important to Deutsche Bank’s argument in the case. Its own fees “were in line with, if not below, market rates,” it said.

“There was nothing suspicious about Mr. De Vries wanting FIFA to be involved in Vestia’s dealings” with the bank, it said in filings, and “FIFA outwardly appeared to be a legitimate and reputable business.” The bank paid fees to FIFA on a transaction-by-transaction basis, it said.

Greeven approached prosecutors in 2012 to tell them about his involvement in Vestia’s trades, after he saw a press report on Vestia’s financial strain because of its derivatives. That led to the arrest of De Vries, he said. He stopped paying De Vries because with the coming new U.K. bribery legislation, “various banks that I was dealing with were starting to talk to me about anti-bribery issues.”




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