Deutsche Bank and former banker settle $176 million lawsuit for undisclosed sum

Deutsche Bank Reaches Settlement in $176 Million Lawsuit With Ex-Banker

Settlement Details and Ongoing Legal Disputes

By Tom Sims

FRANKFURT, Sept 7 (Reuters) - Deutsche Bank said on Monday it has settled a lawsuit with a second former employee who sought damages in a case involving business with Italy's Monte dei Paschi, days ahead of a trial that threatened to embroil the bank's CEO.

Background of the Lawsuit

The banker, Dario Schiraldi, had sought €152 million ($176.62 million) in damages. He was one of six former employees who had sued Germany's largest lender over alleged damage to ‌their reputations over their business with Monte dei Paschi in 2008.

Settlement Terms

The bank has now settled with two of the six former employees who filed the suits. It said it had settled Schiraldi's case for an undisclosed sum.

A Frankfurt court, which was scheduled to hear Schiraldi's case starting on Thursday, confirmed that the plaintiff had withdrawn the case.

A lawyer for the banker did not immediately respond to a request for comment.

Official Statements

"The parties have now resolved on a confidential basis all of the claims and allegations that Mr. Schiraldi has previously made against Deutsche Bank and its personnel," Deutsche Bank said in a statement.

Deutsche Bank said that there would be "only a small financial impact" on its third-quarter earnings.

Remaining Lawsuits and Bank's Response

It was the second settlement in the dispute, leaving the cases of the four other former Deutsche Bank staff who are claiming more than 600 million pounds ($812.16 million) in a London court. 

Deutsche has previously described the cases as "without merit", saying that it "will defend itself against them robustly, including disputing the ​inflated, unrealistic alleged losses". 

Scrutiny on CEO Christian Sewing

SCRUTINY ON SEWING

Origins of the Claims

The claims stem from deals Deutsche Bank did with Monte dei Paschi in ​2008. These initially resulted in convictions for the bankers and Deutsche Bank in Italy ⁠for allegedly colluding with MPS to hide losses.

The convictions were overturned in 2022, but the bankers then sued Deutsche Bank, alleging damage to their reputations for being blamed for the trades.

Role of Christian Sewing

The lawsuits have increased scrutiny over how Deutsche Bank CEO Christian Sewing, who is credited with ​cleaning up the bank's ​image, handled the matter ⁠before he was appointed as chief executive in 2018.

In 2013, Deutsche Bank handed Sewing the sensitive task of investigating the trades in question in an audit.

Allegations Against Sewing and Deutsche Bank

A central allegation in the damages' case is that Sewing and Deutsche Bank scapegoated the bankers and ​later failed ⁠to set the record straight.

Deutsche Bank on Monday declined to comment on the Frankfurt case but said last year that its allegations were "false", that the audit had been thorough and independent, and that executives involved "discharged their responsibilities appropriately".

Additional Information

($1 = 0.8606 euros)

($1 = 0.7388 pounds)

(Reporting by Tom Sims; Editing by Miranda Murray and Susan Fenton)