BofA Executive’s Job Said Held Up by Deutsche Bank Probe 

Deutsche Bank AG (DBK)’s examination of how employees handled deals with the world’s oldest lender is preventing Michele Foresti from starting his new job at Bank of America Corp. (BAC), according to three people briefed on the matter.

Foresti, who worked at Deutsche Bank for 18 years before leaving in March, is among people the firm is scrutinizing over a 2008 deal that Banca Monte dei Paschi di Siena SpA (BMPS) used to hide losses, said the people, who requested anonymity because the review is confidential.

Foresti, 45, oversaw rates and European credit flow trading at Deutsche Bank before leaving to become Bank of America’s head of fixed-income, currencies and commodities trading in Europe, the Middle East and Africa.

Monte Paschi is still struggling to overcome financial strains from a 2008 acquisition and its use of derivatives to cover losses, transactions that later backfired and are under criminal investigation in Italy.

Deutsche Bank said in June that it opened internal disciplinary procedures over the Monte Paschi transaction, dubbed Santorini. The review is focused on whether managers failed to escalate concerns over the deal, according to a person with direct knowledge of the process.

Foresti, who’s based in London, didn’t respond to e-mail messages. Spokesmen for the FCA and Charlotte, North Carolina-based Bank of America declined to comment.

The German bank said in January it adjusted its accounting for the deal after uncovering facts amid an investigation by German regulator Bafin. A Bafin spokesman declined to comment when asked about the progress of the probe.

Banks have been forced to push back start dates and reverse job offers for new hires amid tougher background checks.

Bank of America managers had earlier threatened to rescind Foresti’s offer because he can’t supervise traders unless he’s licensed by regulators. Traders in London have been reporting to Bernard Mensah, Foresti’s predecessor, the people said. Mensah, 46, was given responsibility for a new emerging markets fixed-income unit in March.

Source: Bloomberg – BofA Executive’s Job Said Held Up by Deutsche Bank Probe

 

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