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Deutsche Bank chief executive Christian Sewing is set to be named as a defendant in London legal proceedings brought by five former employees seeking hundreds of millions of pounds in damages, according to people familiar with the matter.
The case is expected to be filed in the coming weeks against Sewing, former Deutsche executives and the bank itself, the people added.
It is likely to contend that Sewing presided over a flawed internal audit that contributed to the convictions of the five ex-employees by a Milanese criminal court in 2019 — which were subsequently overturned.
The bankers were sentenced to up to four years and eight months in prison for abetting false accounting and market manipulation in a scandal involving Italian bank Monte dei Paschi di Siena, although they never served any jail time, with the convictions overturned in 2022.
People familiar with the matter cautioned that details pertaining to the lawsuits could still change until the claims are formally filed.
Deutsche has already been hit with a €152mn claim in Frankfurt from another banker convicted in the Milanese case, Dario Schiraldi, who has alleged that the criminal proceedings and outcome in the lower court harmed his career.
Schiraldi, who brought his case against the bank last year after settlement talks broke down, did not name Sewing as a party to those proceedings.
The five bankers, who worked in the UK for Deutsche, are expected to echo arguments made by Schiraldi that the report over which Sewing presided was flawed, damaging their careers, the people added.
When the appeal judges overturned the original court decision in 2022, they criticised both the Deutsche Bank audit and the lower court’s reliance on it.
A day-long mediation session held in London on September 8 between representatives of Deutsche and the bankers failed to reach agreement, clearing the way for a formal case to be filed in London’s High Court.
Deutsche has so far refused to disclose any provisions for the litigation, which was revealed for the first time in its annual report in March.
The lender said it “considers all such claims to be entirely without merit and will defend itself against them robustly”.
The proceedings expected to be brought in the English courts risk further extending a saga that has stretched for more than a decade, but in which the role of Sewing has only recently become apparent.
The six ex-employees were involved in a €2.2bn deal with Monte dei Paschi di Siena starting in 2008, which later attracted regulatory scrutiny and prompted the bank in 2013 to commission an internal probe overseen by Sewing, then head of audit.
That review became a cornerstone of the Milan trial, in which prosecutors alleged trades orchestrated by the bankers helped Monte dei Paschi conceal hundreds of millions of euros in losses between 2008 and 2012.
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