Deutsche Bank and four of its former senior employees are heading back to court, and this time the bank is the one asking for money. According to a court filing reviewed by Bloomberg, Deutsche Bank wants compensation from the group, which includes Michele Faissola, who once ran the bank's asset-management and wealth business.
They say the bank turned them into scapegoats for the accounting scandal at Banca Monte dei Paschi di Siena, the Italian lender at the center of the mess.
Repo is a short name for a borrowing deal where one side sells securities and agrees to buy them back later.
The question at the heart of the case is how those trades were recorded.
Ivor Scott Dunbar, Matteo Angelo Vaghi, and Marco Veroni are the other three former employees in the case. Dunbar previously served as co-head of the bank's global markets unit, Vaghi ran the bank's Italy sales business, and Veroni worked as an account manager. They argue the internal audit was not impartial and was designed to put the blame on them.
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Deutsche Bank sees it differently. The bank says the Italian court rulings came down to how judges interpret accounting rules, not to anything Deutsche Bank did or failed to do.
The bank also denies waging a multi-year campaign to blame the four. On top of that, it says the four broke previous settlement deals and a promise not to use certain documents from earlier litigation.
Deutsche Bank wants repayment of more than £4 million that was paid to Faissola under a prior settlement, plus damages from Dunbar. The bank's lawyers say the audit was independent and looked at everyone involved, including top management, the finance division, and the legal team.
Italian prosecutors alleged that managers at Monte dei Paschi had worked with Deutsche Bank employees to cover up losses through complex derivatives, causing financial statements from 2008 to 2012 to be inaccurate. The former Deutsche Bank employees also faced market manipulation charges. In 2022, a Milan appeals court fully acquitted six Deutsche Bank employees.
Italy's Supreme Court confirmed the acquittal in October 2023. So the criminal side of this story ended with Deutsche Bank employees cleared, while the civil fight in London continues.
Deutsche Bank's spokesperson had no comment. A representative for the four ex-staffers says they are confident and will keep pushing their case in the High Court.
A lawsuit worth £473 million sounds enormous, because it is. But for a bank the size of Deutsche Bank, a legal fight of this size is a small part of a much bigger business.
What makes this case worth watching is how long it has dragged on. More than a decade after the events in question, former employees are still fighting to clear their names while the bank fights to get money back.
For regular investors, this case is a reminder that legal risk does not disappear just because a court hands down a verdict. A bank can win a criminal case and still face years of civil fights, and that is part of what you own when you hold bank stocks.
The London case could take years to resolve, which means more waiting for the people at the center of it. For investors, it is a reminder that in banking, the cost of a scandal is counted in time as well as money.
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