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Deutsche Bank has denied allegations that it trained employees to engage in market manipulation, after a former trader convicted of fraud accused the lender of teaching him an illegal trading strategy.
James Vorley, who previously worked in London as a commodities trader for the bank, has brought a £12m ($16.2m) case in the High Court in London.
He says he was directed by more senior employees to trade in a way that later left him exposed to criminal action in the US.
Vorley has consistently said he is innocent. In 2020, a federal court in Illinois found him guilty of wire fraud. He received a prison term of 12 months and one day for “spoofing” in gold and silver futures trading between 2008 and 2013.
Spoofing refers to placing and then rapidly cancelling buy or sell orders in order to create a misleading signal of market demand.
The tactic was outlawed in the US under the 2010 Dodd-Frank Act.
Court documents filed in London show that Vorley alleged he had been told to “trade in a manner that, unknown to him, exposed him to civil and criminal proceedings in the US” during his time at Deutsche.
He also argued that the bank failed to inform him and other employees that such trading techniques “might amount to unlawful market manipulation”.
“On the contrary, at various times during the course of his employment with [Deutsche] he was instructed to trade in this way by multiple traders,” lawyers for Vorley alleged.
The former precious metals trader says Deutsche breached a “duty of care to train him to use trading strategies” that would not have exposed him to prosecution.
In its response to the lawsuit, Deutsche rejected the claims. The bank said Vorley received “all appropriate training” and “knew or ought to have known that he should not have committed fraud”.
“It is denied that [Deutsche] supervised, instructed or trained [Vorley] to engage in any trading strategy that was contrary to its policies or unlawful,” the bank said.
The lender further said that if any more senior employees had shown Vorley or others improper strategies, “any such teaching was informal and not endorsed or otherwise approved” and “was not known” to the bank.
Vorley said he was “entitled to and did reasonably assume” that “any training which was provided by or sanctioned by other more senior employees of the bank had been approved by the bank”.
The dispute adds to other legal cases involving Deutsche. The bank is also dealing with a separate £660m claim brought by four former senior investment bankers, who are seeking damages tied to an internal Deutsche investigation that contributed to their convictions in an Italian court in 2019.
The Frankfurt-based bank, which no longer runs a major commodities trading operation, has paid more than €15bn in fines and settlements since 2012.
Deutsche said: “We reject the claim and are defending ourselves against it. The bank had, and still has, a very clear market conduct policy which was made clear to employees at the time, and which warned that market manipulation is illegal as well as against bank policy.”
"Deutsche Bank denies training former trader in market manipulation " was originally created and published by Private Banker International, a GlobalData owned brand.
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