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Big Bank Legal Dep't in Spy Confab, Nixed Law Firm Mole Plan, Detective Tells WSJ

By Martha Neil

August 3, 2009, 7:17 pm CDT

Members of the legal department at Deutsche Bank AG sat in on a 2006 meeting in which a private detective was provided with a list of some 20 individuals and entities on which he was expected to spy, the investigator, Bernd Bühner, told the Wall Street Journal.

Among those on the list was a Munich law firm, and the bank’s agents arranged for a mole to be hired at the firm as an intern before the bank’s lawyers called the plan off prior to the unidentified attorney-spy actually starting work at the job obtained at the firm, according to the newspaper.

However, a bank spokesman says the legal department knew nothing beforehand about the plan to put a mole at Bub Gauweiler & Partner, and called the plan off as soon as the legal department found out about it, the Wall Street Journal recounts.

Deutsche Bank has acknowledged that “questionable methods” were used, unbeknownst to higher-ups, in investigations of an activist shareholder conducted by outside contractors under the authority of the corporation’s security department. However, the bank denies that those on the list referred to by Bühner were to be spied upon and says senior management and the bank’s board knew nothing about any such plans.

Meanwhile, the activist shareholder, Michael Bohndorf, sued the bank and its chairman in Frankfurt on Friday, concerning its alleged surveillance of him, reports Bloomberg.

“The defendants acted with outrageous chutzpah, as if they regarded themselves being above the law,” the complaint contends, referring to alleged violations of privacy law. “Both showed that apparently they are willing to use any means and to ignore any rules.”

A private investigator allegedly rented Bohndorf’s home on the Spanish island of Ibiza in order to obtain photos and other information.

A bank spokesman says it hasn’t seen the complaint, but it has apparently been cooperating with Bohndorf in an attempt to resolve the situation, according to Bloomberg.

The bank has retained Cleary Gottlieb Steen & Hamilton to conduct an internal investigation and has pledged to institute new safeguards against inappropriate surveillance in the future.

Although it is based in Germany, Deutsche Bank’s activities are global and a significant amount of its profits come from the United Kingdom and United States. Hence, it is going to have to explain its surveillance activities to regulators in both countries, including the U.S. Securities and Exchange Commission, the newspaper reports.

Additional coverage:

ABAJournal.com: “Attorney Sought Law Firm Job to Spy On Businessman, Regulator Says”