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Whistleblower in the Deutsche Bank Case Rejects an $8 million Award

It’s almost unprecedented that a recipient who is in line to receive an award as a result of his whistle blowing ends up rejecting that award.  Yet, this is the case with Eric Ben-Artzi who exposed alleged securities law violations at Deutsche Bank AG. Last month, Ben-Artzi wrote an op-ed piece in the Financial Times stating his intention to do just that. In it he states that the reason for relinquishing the award is his frustration that the government is fining the company and not going after individuals responsible for the alleged illegal conduct. Recently, there has been growing concern that while prosecution of such cases has risen individuals have often escaped prosecution. “…Deutsche did not commit this wrongdoing. Deutsche was the victim. To be precise, the bank’s shareholders and its rank-and-file employees who are now losing their jobs in droves are the primary victims,” said Ben-Artzi recently. The Whistleblower (or qui tam) Act allows private citizens to sue on behalf of the government and to recover a portion of any award.

Specifically, it has been alleged that Deutsche Bank failed to update the market value of certain credit default swap transactions, known as super senior trades. Ben-Artzi has claimed that the bank thus masked mounting losses as the market value sank and that this hid more than $1.5 billion in losses. In May of this year Deutsche Bank agreed to pay a $55 million settlement with the Securities and Exchange Commission (SEC).  Deutsche Bank and its subsidiaries have been involved in several regulatory investigations in the past. In April of 2015, Deutsche Bank’s London subsidiary pled guilty in connection with manipulating the LIBOR (London Interbank Offered Rate). At the time Deutsche Bank and its subsidiary agreed to pay the US government $775 million dollars in civil penalties.

“Deutsche Bank secretly conspired with its competitors to rig the benchmark interest rates at the heart of the global financial system,” said Assistant Attorney General Baer at the time. “Deutsche Bank’s misconduct not only harmed its unsuspecting counterparties, it undermined the integrity and the competitiveness of financial markets everywhere.” Recently, former Secretary of State and current presidential candidate Hillary Clinton has said, “There has been no bank too big to fail and no individual too big to jail.” If you know of fraud that is or has been committed against the government, you are encouraged to contact a qui tam law firm. Qui tam lawyers can help you understand your rights in these cases.brand