Ex-Deutsche Bank quantitative risk analyst Dr. Ben-Artzi has filed a whistleblower lawsuit against the financial firm. He claims that the bank accurately report its credit derivatives portfolio’s value and that he made his concerns known internally. Ben Artzi is one of three whistleblowers accusing Deutsche Bank of improper reporting to hide $12B in losses. He says that that he decided to notify enforcement authorities because the problem was not addressed or corrected by the firm.
Per his claims, between 2007 and 2010 Deutche Bank, the biggest holder of LSS trades at the time, did not give proper value to the gap option part of its Leveraged Super Senior tranches of credit derivatives portfolio and, as a result, who knows how many investors were hurt. Failure to give proper value to the trades, Ben-Artzi contends, caused the bank to continue projecting the image that it was doing a better job of handling the global economic crisis than other financial firms.
In addition to notifying the Securities and Exchange Commission of these alleged violations through its Whistleblower Program, Ben-Artzi has filed a retaliation complaint with the Labor Department claiming violations of the Sarbanes-Oxley Act’s whistleblower protection provisions. Ben-Artzi says that as he made his way up the chain of command at the bank to try to get the valuation problems remedied, he began to experience isolation and hostility on the job, was not allowed to access records he needed to perform his duties, and lost certain responsibilities as well as a degree of autonomy. He also claims that when he came back from paternity leave last year, Deutsche Bank told him that is position had been transferred to Europe, and he was laid off without being offered the offered the opportunity to transfer or find a new position within the company.
Deutsche Bank is denying Ben-Artzi’s allegations.
Whistleblowers are entitled to certain protections, which includes freedom from retaliation on the job for trying to report wrongdoing. Also, under the SEC Whistleblower Program, individuals that provide quality, original information resulting in the ordering of over $1 million in sanctions may be eligible to 10-30% of what is collected.
With so much at stake, you want to make sure you are represented by an experienced whistleblower law firm that can protect your rights and make sure you get your award.
Deutsche Bank Accused of Hiding Massive Losses, Courthouse News, December 7, 2012
Sarbanes Oxley Act of 2002, SEC
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Securities and Exchange Commission Received 3,001 Whistleblower Tips During Fiscal Year 2012, Boston Injury Lawyers Blog, November 30, 2012
Whistleblowers That Report Bribes to Foreign Officials to the SEC May Also Be Entitled to 10-30% of Recovery, Boston Injury Lawyer Blog, October 26, 2012
$25M Whistleblower Settlement Reached in Hospice Fraud Case Against Odyssey Healthcare Inc., Boston Injury Lawyer Blog, March 5, 2012