World's 'Dumbest' Bank Gets Caught Again
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Well, back in September last year, the bank was busy cutting down its exposure to Lehman Brothers, but then someone executed an erroneous (and unstoppable) automated currency swap valued at $426m with Lehman on the very day it went belly up! The German government was up in arms and the bank was the object of ridicule at home, with Germany's biggest-circulation newspaper, Bild, splashing a 'Germany's Dumbest Bank' headline over its front pages. The upshot was that two of the bank's management board members were suspended pending an investigation, and one, Peter Fleischer, ended up getting fired and taking the bank to court in Frankfurt.
And guess what ? Fleischer won the case. The bank was ordered to pay him 2 years salary, bonuses and interest. Nice.
FT Alphaville reports that shares in Commerzbank rose over 18% Wednesday, after the European Central Bank approved Germany's 'bad bank' plan, which will allow participants to offload toxic assets from their balance sheets and pretend that they don't exist
The Financial Times reports that Bank of America was hoping to raise about $3bn from the sale of asset management unit Columbia Management, but bids are described as 'lukewarm', and the unit may end up only fetching $2bn.
Bloomberg reports that Nomura has agreed to buy Citi's NikkoCiti Trust & Banking unit for $196m, which has 107 employees.
Finally, FT Alphaville reports that Sir Allen Stanford, the Texas financier who has been accused of orchestrating a $7bn Ponzi scheme, has been refused bail. He will remain in custody at least until the completion of his trial, which due to start on August 25th.
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