Deutsche Bank AG (NYSE:DB) has suspended the sale of complex foreign-exchange derivatives in Spain, following an investigation by the country's securities regulator, CNMV. The probe is centered around potential violations of rules that prohibit marketing these intricate financial products to inexperienced buyers, including small businesses. This development occurred on Tuesday.
The European Central Bank had previously expressed concerns about Deutsche Bank's insufficient explanation of product risks, which resulted in significant losses for clients who found the products too complex. In response to this scrutiny, Deutsche Bank is not only halting these sales but also attempting to wind down its existing portfolio in Spain.
The current situation echoes a previous investigation into Deutsche Bank under Project Teal. This earlier probe was concerned with the alleged mis-selling of other foreign exchange swaps by the bank's investment banking division.
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