Deutsche Bank to check emails of former executive Louise Kitchen
Deutsche Bank, fighting a €500m lawsuit on possible misselling of risky foreignexchange derivatives, has agreed to search emails and records of a former executive, Louise Kitchen.
The German lender will search Kitchen’s records as it prepares for a London trial with a Spanish hotel operator, according to a filing on Monday. The agreement came after the operator asked why she hadn’t been included in a list of what it characterised as key individuals for disclosure purposes.
Requests for documents and other possible evidence are standard parts of most lawsuits and don’t indicate any suggestion of wrongdoing. Deutsche Bank also said it would search documents of some other staff not named in its legal filing.
Deutsche Bank is facing a lawsuit from Palladium Hotel Group, an Ibiza-based hotel operator, which says it suffered losses tied to hundreds of complex derivatives. The transactions were “impossible” for Palladium to price, value or understand, the company has claimed.
Deutsche Bank is now investigating the transactions as part of a wider probe known as Project Teal, according to Palladium. The investigation started after a number of Spanish clients complained that their deals involving complex derivatives saddled them with deep losses even though they had purchased them to hedge risks.
Deutsche Bank says that the London case is without merit, and that the Matutes family, which controls Palladium, are sophisticated investors.
Deutsche Bank promoted Kitchen in 2017 to a role that helped oversee sales of fixedincome products for the German bank, everything from currency derivatives to government bonds. She became co-head of Deutsche Bank’s “bad bank”, the capital release unit, in 2019 before leaving the lender last year. She now heads a similar business at Credit Suisse.
Kitchen’s lawyers declined to comment on the disclosure issue. Officials at Deutsche Bank and Credit Suisse declined to comment.
The lender said previously that searching Kitchen’s records was unlikely to yield unique documents that could be relevant to the case, but has since agreed to search them, according to its court filing.
The lawsuit is focused on the “overarching question of sophistication and trading expertise,” said Sonia Tolaney, a lawyer for Deutsche Bank, saying that “eyewatering sums of money” were being claimed. Palladium is trying to argue that its officials didn’t know what they were doing, she said.
LAWSUIT IS FOCUSED ON OVERARCHING QUESTION OF SOPHISTICATION AND TRADING EXPERTISE