Deutsche Securities Faces Warning for Trading Collusion in Japan

Deutsche Bank AG’s Japanese brokerage unit, Deutsche Securities Inc., has received a warning from the Japan Fair Trade Commission, a regulatory authority regulating domestic economic competition, after the group found evidence that one of its traders colluded with a counterpart at Citigroup Inc.

In particular, the episode focused on the trading of European sovereign bonds in Japan and represents the first notice given from the Commission to a foreign securities company operating in Japan, according to a Bloomberg report. Between April 2010 and March 2014 the trader at Deutsche Securities Inc. had exchanged order details and other sensitive information with a Citigroup employee.

These two traders also coordinated on a number of different practices, including pricing and orders between themselves – this occurred for a period of nearly four years. More specifically, the transaction volume ranged from several hundred million yen to several billion yen, which consequently prompted talks with Japan’s Financial Services Agency (FSA).

The warning was lobbied due to the frequency of deals executed by the trader at Deutsche Securities. However, a warning was not given to Citigroup Global Markets Japan Inc. as the unit has since implemented an appropriate Compliance Compliance In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a Read this Term system, as determined by the Commission.

The collusion and bond trading appears to be isolated to these two individuals, ultimately trading sovereign bonds of countries such as Germany, France, Italy, the UK, Denmark and Norway with institutional investors.