Draft Convenience Translation, 13 May 2015 ~ subject to further review - Convenience Translation = [Letterhead of the Federal Financial Supervisory Authority (Bundesanstalt fur Fhanaaienstestungsausict), Bin] BaF] Postiox 1253 | 53002 Born Return Receipt Personal/Confidental Devteche Bank a6 = Management Board - “Teunveanage 12 60325 Frankfurt am Moin 11 May 2015 Ret o.: BA L1-K 5112-100003-2013/0002 (peste alveys sate) 201570733319 My suo order date 13 August 2013 ‘rt report for the IGOR speck au >y Est & Young dated 31 March 2015 Enclosures: 1 (aul Report) Dear Sis ‘Lam sending you encioed the report onthe special aude pursuant to Sec. (2) sentence 2 German Banking Act (Rredtwesengesez, “KWG"] of he austing frm Emst& Young ("EY") on ‘the forensic and organzationl aut of the tebtment of reference interest rates and the relevant business environment Inthe hvestment bank aswell ae my analysts and evaluation of tis report 1 wit send you Immedately a supervsory assessment, aso In the overall view with other audit reports, I already wish to ade at this pont that I wil aso eoncusively examine Imposing baniongsuperisary measures in tis context whieh Icorsider to be necesry. Coveat the aut report dlsoses major misconduct by varous traders of Deutsche Bank and by atleast one member ofthe management of Deutsche Bank, London Branch, as wall 35 art major fatures by members ofthe Management Boarder the Group Executive Commitee. “Thee ee lso ston! ergonzatonsl defects in dealing with reference Interest rates and the business environment of submissions Including the contol mechanisms an the tac Infestructure, wtih continued, despite what had happened prevousy, at last unt the end of the yer beginning 2043/begining of the year 2014, ‘Akhough EY conchdes that no indcatons were found that you or former members ofthe Management Board as well asthe GEC (ef. Below with regard to the detas and exceptions) knew about manipulations by employes of OB prior to the year 2011 or structed employees to engage In manipulations, a Business and organzational environment was created which at favourable to incorrect IGOR submissions or even made tem possible Inthe fst pce ‘The senior managerant ofthis business must face te allegations of having acted negligently In that, by creating the corresponding envionment, If favoured precices that expoted confess of interest and ignored oryarkzatoral dutles pursuant t See. 252 KWG i Conjunction wh Male z wall ae other provisions Inthe Iw. fhe measures rogue orbroper management had been taken here in a timely manner or F te matter had atleast subsequent been dent with ferent on the whole, ths could not only have been saved Immense costs forthe Bank, but the tustworthiness of the Bank would rot have Been harmed n such a mame, ele. This aso apparent from the documents published by the US and Ux pubic autres inthe 180R mater Fy findings are summares below, and { consider most af them to be indi, but Ms. Mathur and points ut thatthe vansmisslon of trading postions to the Cash Desk was :ommon inthe context ef hedging. 1 so understond from Me statement that he bad nly Deen concernee with hing risks 9 far ab Ms. Mathur was concered and that he had never dIscused TBOR submissions with her, partculry since Nis postion Inthe Rerarchy had been ‘our eves above that of Ms. Mehur ana he therefore hardly ad hod any conta wth her, The shove fdings and suspcous facts ge me partir cause for wory and rake onsderabie concerns especialy In lige of the fac that Mr. Clete and Me. Falisla are GEC ‘members of OB who work at a senstive place at OB and, terefore, should be above all susplcion, In my view, and In accordance wih the assesment by EY vith regard to Hr. Coe, thee rerain major doubts laced to fs personal knowledge of manipulations, oF ven his instruction to engage in manipulavons, port Jone 2011. Tere remen Bfo doubt ‘th ropa to Mr, also. 2) Knowledge of employees of DB about discussions in the market concerning the possibility of manipulations of the LIBOR in 2007/2008 “he faings of EY show that, In the fst haf of 2008, there were rumors end decussions in ‘ha markat about LIGOR submissions whieh devieted from the market, and ab0v8 te suscepsblty of the LIBOR to manipulation and thet st DB, among others, Mr. Clot, ir Neha, He. Fassla, Me. Groeksme, Me. Cuter and Mr. Aligten worked on this tole {nd also informed Mr. Jalnas the person responsible for GM and, ths, aso the GFF avsen, out ths (cf, TB £, margin nes S12 et seog.). The folowing Mnangs of fet show how gene te would have been alraady In 2008 to Investigate the GFP svson wth rege to he possity of acts by Is traders which manipulated LISOR but such an Investigation wae not onducted. Furthermore, they show that He Jan had been Informed alresdy In 2008 about ‘he clscussins in the market relating tothe susceplty ofthe LIBOR to manipulation Ne etsela reported to Me Jain - forthe fret ime, accorsing to the information availabe to © = stout UBOR submissions which evised trom the market by e-mal dated 21 August 2007 ater He. Fleola hac forwarded to Mr. Jan ell correspondence that had been conducted previously with Mr. Broeksmé (TB 1, argh no, 511 and Set of Exide, exhbe 2. bn an ema dated 7 March 2008, er. Nichols Informed Mr. Jl Mr Clote and Mr aisle ‘hat the Interbank markets were moving In a dvergent lection and thet there were barks ich were eying to etal gut for upto 50 basis points above the reference intrest rate {hey rad determined (TB margin no, 518 and Set of Exhibts, Exile 2). The neceesoy ‘conclusion based en this information was that banks had reported reference rates which were tpolow. fn ate appeared Inthe Wall Steet Journal ("Bankers cast doubt on key rate amid ss ‘et of Exhibks, Ex 3) on 26 ApH 2008 In which there was 2 report about the concerns of art prtlcpanes with regard othe reliably of the LIBOR; this ivalved lowealng” and ln one paragraph also the possbity of transmitng false intrest rates n oder to profit rom cerivaive transactions a well as the possiaity of caluson among banks IF 2 sufcent umber of isttutans eoerdnated thar eanduct (Set of Fahne, Fen cf. leo, Tf,‘margin ros, 519-522). In an evmall dated 16 Apr 2008, the WS) article was sen: by Mr. Kesha Hemant inteally within the ban to an unknown group of recplens (TB 1, margin ro. 523)- This was followed by e-mall conmunicatons concerning this WS) ate between tr. Bonz Weinstin and Mr. Alm Coet; Mr. Coste etated erat the LIBOR no lnger represented a realist rato (TBI, margin nos. 523-528). (0n 17 Ape 2008, there vas 8 telephone call between Hr. David Melis, Mr Mike Curler ad tir. ohn ewan of the BOA in which Mr. Nichols referred to the above WS) ate, Mr. Nedots ‘ated, contrary © RS batter knowtedpe, thatthe WS] ate contained wrong Information land that there could be no tak about eny traders manipulating Ue LIBOR In orde’ to maximize profit er banks working tgather In 2 colksive manner (TB 1, margin nos. 529- 535). ‘The discussion about the caleulaten of the LIBOR that made the rounds In the market following the WS} arte was the subject of two e-mals from Mr. Coete to Mr. Jae on ‘20 April 2008 and 15 May 2008: He. loete refered In Ns e-mals to the rumors about the {UBOR (“recent noise sbout How or cxcuited."; "the noise eround the UBOR benchmarking. TB b, margin nos. 538-540). This shows that Mr. Jah was informed about the LIBOR elcacsen nthe market nthe Rs half of the yese 2008, ‘A mecting of the BBA tk pace in May 2008 withthe LIBOR pane banks concerning the Issue of chanoing the submission process, and OB was represented by Mr. Nichols and F Curie. In advance of the mesing, Mr. Clete, Mr. Fassoa, Mr. Aldngton and Mr. Ncroks had agreed that, in the vew of DB, she changes in the xing ofthe LIBOR shouldbe as shall 25 possible (B I, margin nos. S53 et seq. especialy margin nos. $57-560 and 55S as wel as the Set of Exits, een 7), lobo! Markats Research set report withthe tke "Repiing IDO ko cstrbuton It on the 27 June 2008, Include alo to Mr. Jaln end Mr. Falssce. The report concerns the pending noticaton of the BEA concerning the result of Ks Investigation of LIBOR feng. Reference i so made Inthe report to the possibilty tha banks were submitng ncorect submissions and the posabity of ealusive conduct By Benks, bath of which, however, were ‘Coouterad to be ures However ths vapor agen rleed the ve ebout the poestany of ‘manipulating te LIBOR, even though tie wae conscared & be Improbable (7B 1, margin nos, 572 e ea), In ew of the alscuson about the relablity of the LIBOR, on 1 June 2008, Mr. Timothy Gethner regona head ofthe Fd at the tne, submited recommendations tothe ‘Bank of England for preening unintentional or intentional ncorect submissions (TE 1, ‘margin nes. 567). Dr. Loar stated on this pol In an evmall ef 20 February 2013 © ‘Me Mehae! Golden, whic he leo forwarded onthe same day to Mr. Jn, tak Ie wou bo Detter if thse recommendations by Timothy Geltnner and the dscussion about the LIEOR conducted In 2008 were rot mentionad to the press because otherwise the question would be ralsed about why nobody at DB had reacted at that time (TB I, margin nos. 187; 687-691; 766), ‘on 10 June 2008, Hr. in me with representatives of the Bark of Enpland; he was infored In advance of tis mestng by Mr. Charis Aldington that he would also be asked about LEO. (7B 1, margn nos. 577 et seq). At he request of Hr ldngtn, Mr. Clete informed Mr. al ‘bet the rests of 2 meeting of Mr, Nchols wth the BBA in Aol 2008 pr to. Jans ‘meeting with the Bak of England; Mr. Coeta again refered In his e-mal to incorect LUBORsubrissions by inidal tanks and expisined thatthe OBA had examined posibiles of ‘modtying the LBOR submission process, for example, by increasing the number of panel Banks (ef TB 4, margin nos. 107 and Set of Exhibits, Ex 12), Mela sated to EY that bh coud not remember whether the LIBOR Issue had been cscussed at the meeting withthe Sank of Enalnd (T 1, margin no. 106). In November 2008, Ms, Shani Mathur, @ trade Inthe Rates dision at 08, prepared an ansiyls about te rondom nator of IGOR submissions of Devtsche Bank and ether panel banks (‘Analysis ofthe randomness ofthe interbank offered rate submisions ef 08 and other Dane! banks) In which she cance the EURIBOR rates had been transmitted intially by OB ‘and subsequently by French barks which, in part, were substantally below the corresponding average rates of the EURIBOR. She transmitted this analysis to Mr. Miele Flo Ns. Mathur stated to EY that she hed prepared the analysts In order to justify che resus in her trong book for her superiors (7B, margin noe. 600 et seq) ‘As mentioned above, the sated fats dearly show that It woud already have Been necessary for Dain 2008 to conduct an Investigation ofthe GFFX business wih agar to the posity of BOR manipulations 2) Organizational parameters and environment surrounding the 120R submission ‘The findings concerning the subject matter of the organiztionsl parameters and the fenvitonment for the TBOR submissions show that, starting inthe yea" 2007, there was a business cure and a general framework shaped by the management atleast up to the evel ‘of Mr. Jin and Me. Coete whch favoured problematic communications and (atterptec) IBOR ‘manipulation. The role of Wr. Cloete appears to be predominant and problematic In several respects, Homever, this abo apples 10 Mr. in, elbelt ate higher endless direct level of Fasponstliy, ‘The goal ofthe reorganization of the seaung order in the wading dvison la London Inthe year 2005, wbich resulted in traders and submits siting togsther, was to achleve an ope Femmunicaen between both funclors, aspacily also wih regard to the LIGOR. The reorganization of the GF#X sector was Intited by Mr. Jain who was also decively responsible for ths; Mr. Clete Implemented te reorganization, There is 9 connection with gard to timing beoween the reorgenzaion ofthe GFFX évson (wh the HD desk, the change Inthe Fading strategy upto making Inenee Use oF IBOR Spreads andthe generation of pros Ina range whlch had never been realized preveusl (or sfeerwards), hough the auotors of EY conclude thet they could net Ident any direct ‘ausl connection Between the reorganization of the business dvsion andthe generation of partclany high trading resus (Te 1, margin no. 975), 1am of the vie, based on the facts Identied by EY and the close reltonship entrned between the change sestng order he {adng soot Hs Landon aed the gure Niger prot, Oat“ ado to Ue ew bal strategy and the changed situation In the market ~ alo the reorganiaton of the trading vison (with the improved possiblity for communication between tracers and subatars) was ot last an indirect cause of higher profs and favoured this development. The sated Indirect eects seen inthe fact that te control envranment af the Dank nthe GFX dviion tna by fer not suicent fo preven conflets of intrest andthe explteton ofthese cofits BF itareat, be Ten the eantett fading transacsont or In eannecion wih atemptes ‘varie of influence on reference Interest rates,“The ND desk had substantially higher esmings inthe period between August 2007 and Wercyaprl 2010 than had been previously or subeequenty genented, There wee & signfcanticrase the PBL for the firs ine In August 2007. The pots ware partly rasti In 2008 (EUR 1.9 biion). The pofts were slo clesry increased at EURO illon Ia 2009 (781, margin nos. 900 et Seq). Me Jain knew the tracing strategy and the trading ‘result ofthe MMO desk atthe atest starting on 30 Avgus 2007. Mr. Goet explained to him {he trading strategy of the MRD desk and indicate tha, expecly the trader Chritian Baar hh been vry succesful (TB 1, margin no. 905) ‘Te high pros ofthe MMO desk ware the subject of two Interralaverigatons ot the bank ‘These ievestgatons conducted by Hr. Srosksmit and the Business Iterly Review Group (GIR), however, were not completely Independent, not comprehensive and Sd not 96 deep enough. AS a resut of the 20 caled Broeksmi investgation, orered by Mr. ain In January 2008, assurance was supposed to be obtlned thatthe profs ofthe MMO deskot Hr. Bitar were real and has not Been caused by fee valuations or intemal transactions (TB fy margin nos. 910 e& seq.) Tt must be noted In tis regard that t would have been ‘mandatory In my view, to examine the profs under the aspect of compliance ard potent BOR manipuaticn and not ust as to whether theze profits ware rel ond did nat elt ony on paper. In the interest of the “rt tne of delence, Mr. ain shodd have tiggered © ‘comprehensive complance check and, # appleabe, an vestigation as ueya& posse Me. Rteette requested the BING Investigation; he stated to EY that so much money hac ever been earned before and that k was 8 cardial rue in risk manegément that there Was cause for concer ia great amount of money was earned or Ia great omeunt of money Was Tore. BIRG woe supposed to lek fr fraud in his sisson (TB margin no 913), but IMG found nothing (on ths pabt, see below), despite an analysis of cammunicatone dt, Inctudig also Mr. Bitar’ suspicous emmmuniatot. {mn acon tote physical parameters, there were also specie nstrvctcn by Mr Mls the tracing civision when promoted agreements and improper conduct nvilaon of cai bf imarest and compliance urements EY found that tars at the MMD desk in London were required by David Niehols to regularly communicate with traders st the Frankfurt Cash Desk (TB, margin no. 869). The assertions by Mr. Kazpaut, a5 ne of fur Frankfurt waders atthe Cash Desk who were cemleeed by 08 on the base of manipulations of TBOR and who for thelr part state that they were Instructed 2y DB to regulary emmunicte withthe MHD de in London, must alzo be mentioned. He informed EY tha, trom 2008 onwards, the communications between traders In Frankfurt and London greatly Increased, espectlly when Mr. Anéreas Havschil eft 9 Heod of GF Continental Europe a the 1nd of 2006 (TB 1, margin no. 871). Mr. Bktar sated to EY Ent al reference interest rates ad been openly discussed between derivatives and cath traders and tat te tbls forthe traders had been arranged In sueh manner go that tis communiaton was possible wth the ‘ul knowledge of senior management (TB I, margn no. 871); he salé that conMets of lnteest ad been ignored, and was notable to real tat concerns had been expestes with regard to emptance (7B I, margin no. 872). ‘hare ae ako clear inleatons thot the bonus-diven compensation system gave rise to er ‘enforced an inerest of tader In cetin developments In the Intret rates snd that te ‘raing strategy estabished by te management c the trading divson acdorally furthered 2s interest“The conflts of interest that arose betwaan traders and submvters as 2 result of the lack of separation of the functions ang the circumstance thatthe compensation system establshed & peticular Incentive for exploting these conflcts of interes, In my view, shoud have been recognized bythe senior managerant of DB, at last to the extent Nat the madagement responsible for the tracing deision concerned. According to the fing ef EY, sich onflets of interest wore actvelytragered or reinforced as result ofthe new organizer structure of the GFX clusion. In view of the facs descrived above, Ido not share the ‘assessment by the audleors thatthe corresponding confets of Interest had "not been recognized by senlor management (TB , margin no. 973). 4 must be noted that it was grimany the trader Christian Bator who generated the ‘extraordinary profs and that attention had been drawn to hen ao a a result of conspeubue communigations and thus attempted manipulators. Even F no conntton can be proven between the suspeleus communications and the extraordinary high rafts, there are mony lndleatons that = In adaton to the new trading strategy starting In 2008 and the greater ferences between shoct-term and long-term LIBOR rates resulting from the franca erie fn any ever, the problemate communication or even attempted manipulations were aio the ‘reason forthe enormous trading ress, According to my assessment, the relationship of Mr. Bitar to ns superiors was que remariable. Mr Bar was te predominart trader inthe GFFX Avision and was ago Weated ‘sccordingly. Mr Jain, who was Gobal Head of Giobal Markets in 2008, know and promoted Wr. Bitar and supported Me. Btar's entlement to a bonus before Or. Ackermann, 25 Is pparent frm @ telephone call between Hr. Jin and Dr. Ackermann co 7 January 2007 in ich Hr. an referred to Christian Bitar and Car Male, among other words, 26 "9000 207, they are he best people onthe street" and "the best guys we have got" (T8 I, margin tes 120; 1281), ir. Jan himself nad obviously approved the earnings-based bonus, whit Me. Bar ecved ‘rom 2004, within 24 hours In light ofthe fact that Mr. tr wanted to gle nolee of sarmination due fo an ofer he had fom @ compettor (TB t, margin nos. 1249 et se) Wr dan formes Or. Ackermann about great profs ("mountain of money) in te elepone salon 7 January 2009 (TI, margin nos. 1261 et seq.) and tha, a2 consequence, Me ‘severely high bonus claim of Mr. Bktar and Mr. Ma na atl of EUR 130 mallon had been 2praed and that half f the bonus dtm was Supposed to be pod et ely in the next ye le eered to Mr. Bitar 25 "guaranteed maney maker” (TBI, margin et. 120; 1282). fttenton 1 drawn to the cohedence In terme of te between ending Mr tar to Singapore at the begining of 2010 and the fist Inquiries fom regubtor on 13 January 2010 and 5 Februsry 2010 (by the SEC). EY also sates n this regard that 99 ommunleaton could be Identied supporting the allegation made by Mf. Btar that he hac Ateady esd for 8 transfer to Singapore In 2007 (TBI, mergin 9. 1234) ‘The enormous increase In the trading profs of Hr. Bitar and, thus, ako the enarmcus crease In is bonus enteeriensscolncde interme of tine withthe restturing ofthe GFF division, ‘The question accordingly arises as to whether an to what extent the restrucurng oF the vision by Me. Jal and Me Cloete was specially mace ln ener to gle, amcng thers, Hr. Btar de pss of deci communiatng wit the submitters and accordingly ‘chlevng higher trading profs. Tn any event, te clnléenc in lng between te phyla! ‘hanges ia the GFE vison and the substantially erased ads profes at OB is “emerkabie.2 foloms from the contadtory statements of Mr. Coste and Mr. Bitar concerning the Content of thelr private dcussons in @ London hotel In the context of the dsmisal of fe Bktar that elther Hr. Closte made untruth statements to EY or that Mr. Bar or his storeys made untruthful eatement In ther laters 69 D8. Aecirding tothe slegstone by ‘he actomeys of Mr. Bitar, whlch Wr. Closte dsputes, Mr. Cloete supposedly informed ir. Bitar that he (he ltr) had not ne anything wrong and tat he was Instead a vim of "al these Internal and external pots” (TB 1, margin no. 1326). Ths statement of ir Bitar» assuming that Ite true can be an Indication that Mr. Clete naw about the sttempted manipulations en the par of Mr. Batar already at tat tine, 1 remarkable in this context that alzo Wee ofthe four Frankfurt I80R traders who were Césmissed by OB and who fled complains agaist the termination of employment made statements which, assuming that they are correct, could ghe ise to the concusion that ie. Coete was involved In the false submissions, that he had no interest In changing the [ocess and taking consequences, that he was not convinced of the necessity of an lnvestigaton or substantive changes and that he oly actee because he saw no other way to old beng arown Into the focus of the sestigatns. The fact that tis conclusion Is fverything ther than remote despite the statements that have been dsputed by Mr. Coates tiso apparent In the overall iew ofthe elements of susption concerning Me Cate in the fiscussion about his eesponsbiles below, In any event, this raises substantial doubts about tne bellevablty of Mr, Clots az 2 result ef te overal Impressions and te large numberof contradictory statements. 4) Reporting ines and controls in the trading division in the context of the 15OR submissions 1 ters of re management and control envionment, there were considerable deft in he (GFX alison (and, wenn such dvson, In the HMO Dest), whieh was respon for the {OR submissions. The fndings of EY, of which only the main facts are deat wih below lead to the Inevitable conclusion that ths business dvsion wae obviously fecueed on ee ‘maximization of pote with 2 clam to almost absolute vallty, woot, Nowever, puting ‘ace any even remotely wel-matched cual. AS 2 result ofthe lack of Balance created by ‘be management, this paved the way fran enviesnment which would urgently hava rquled strang control functions and 2 eeresponding risk management culture Rot only because of sxartory, especially regulatory, requeements but also In the bani’s own intrest in an ‘eave sk management. Moreover, an early Investigation and analysis that were net Inerly superior even possbly biased ining te rats would have been Imperative. [F orives 8 the flowing conclusions with regard to the reporting and responsbity nes whieh, acorang to te regulatory author's undertanaing,canstute the base ammewore forint contol and responsibilty In the rst in of fens ‘he weitan reporting Hines were In par Incomplete and contredktory and the everyday sroctice devoted from the prescribed strctre (TS 3, margin nos. 1261 seq). ‘quirements or standards exsted onthe monitoring of the trang ctvtes endo Farther specication was glven by the GFFX division (at from 2022: FIC), ether (TB, margin 70,1163). Impimentad control tol, such at trades mandates, were used only to @Iied extent ar algo the performance management process, which served to assess employees, vs implemented quledferenty at various hierarchy levels and locations (TB f, margin, 164).‘The focus Inthe GFFX dvion was leary en the business figures and not on comple by the employes. bases tis conclusion onthe fect that a numberof init nthe GFFX dvcien,Inucing Mr. Cur, Mr. BREaF and Me Meno, dd nek complete thelr mandatory compilance traning (78 1, margin no. 1057). The employees conduct Is reflected by thelr superiors. For example, EY found that the completion of the mandatory trainings by GGFPA/FIC employees was not effexvely montored although the senor management, namely Hire and hr. Coot, Knew that these mandatry wlnings cd not receive the vequved atten (181, margin ne. 1160. ‘Regeding the intensity with which management and senor management were lnvlved in he handling of trading strategies andre postion EY notes ae Follows ‘The reporting lines inthe context ofthe IBOR submisslons provide Information on areas of responsbilty and montering obtgatins, In particular under the aspect of sufficient risk contos. in tis eantext, It becomes clear thatthe control environment a& OB, whieh Was pareutarly Imporant due to the high nists In the trading disin, wae chaactrsed by Eonsderable weaknesses. This, in tum, Taitated and fostered the problematic conduct DY Individual waders n espe of certain cing strategies depending on reference rates and 6 respect of eanflet-prone conduct surounaing communication and tubmisons. Te hus Rad both a direct and indrectimpect on the 1BOR submissions. ere 0, Hr. ete sn a prominent poston and beers a particular responsibilty in severat respects, This also apples at leas in par, and ayan at an even higher level of rsponsiiy, ‘Me Jan EF finds thatthe unasputed reporting line relevant for the present Investigation led from Davis Minos via He. Alan lost to Mr. Anahi 8in nd, unt 2008, from ee Inter to Dr. Josef Ackermana (TBI, margin ao 1034), According to Mr. tar, Hr Clete changed the enna egartzatonl structure of the GFFK wson, which was tased en product thes, to an organizational stucure based on geographical criteria, “He added that the reporing lines were cific to depict in an ganization chart (TB 1, margin no. 1033). During the period investgated by (anu 2007 un ne 2013), Mr Jan, We leet and Mr Mehols were Informed on daly Boss by way ofs formal reporting ofthe rk pestens ‘nd in patctar the P&L development inthe GFE cvson (78 I, margin no. 1088). vr Bttar sated to EY that he had spoken in person with Me. Walls and MF. Clee when necessary (78 1 argln no. 1086). MF Wcels told EY tat, n the years 2007 to 2008, ne ned mare regular contact than before with Me. ain Inthe context of GMEC matings, He {ied that, cutside of that committe, communications to Me Yan Rad been va Mr. Coete "8 f, margin no. 1092). ie chased so-aied “Handy lek Cola", In which treders from London, New York, Tolyo and Frankfure who reprted to Mr. Mehots gcusted with ach other nd with thelr superisoe te market events os well as thelr trading strategy and trading poston. tr. Nichols Issued clear Instructions to te traders on how to proced In these calls (TB I, margin ros. 1096 et sea) Wr Cloet#'s workspace was inthe Immedlate vnty of Mr Neholls and Me tar. Therebout certain topics between Me. Clete and tr. Bktar (TB 1, margin os. 1108 et sea) Nr. ear told EF that tnere was no d¥ect reporting line to Mr. Jln ut that he ad met Hn several mes (T8 1, margl 90.1107) In summary, EY finds tha the selor management, 1, MF. Jan, Mr. Cloete and Me Meals, ea with the teeing postions ofthe GFF dveion on dally and eventcriven basis, mosy fraly and ot # lateral level (TB 1, marg no. 1111)... Cate and Me. Jan regulry montored the trading postions and the developments thereof in the GFFX division. In enizes, EY has not found any inleations of any eect involvement of Oy. Ackermann In the ‘ontering ofthe trading actives (TB, margin na 1145). ns vsk management, several des else Inthe celevantperlod according to verout Investigations. According to an investigation by Over Wyman in 2007, tere were, among ater things, metnedoigial weaknesses In isk measurement and dei In rie montorng; Deutsche Bundesbank ereties e 2009 2 numberof organizations ant structural def, Inching with regard to the processes for montorng market price ras, and Metinaey ‘te2ed, also In 2009, hatin parular sucessful dvslons ware nat suictenty serine (7B 1, margin no. 923). Moreover, the VaR of tre GFPX svslon exceeded the sattery VAR limit as fom November 2008 for several months (TB I, margin no. 952). In aden, He. Coote expressly permited Mr. Bar to continue pursuing his trading strategy, wang the high risks associoted therenth, athough Mr itr Trequently exceeded the tis Drescrbec by the rk function (‘Keep going you doing greet, TBI, margin nos. 1116 et seq.) Mr tars supervisors (Wr ONS, Nr. Close and Mr. ain) were aware of and roerated the fac that Hr. Bitar regularly exceeded tracing ks (TB, margin no 111). As regards organizational and procedural responstbltes, an atleast nrc respontty of, Me. Coete for the TBOR manipulations can be assumed. This conclusion also applies 1 ean, abet at an even higher evel of responsi so the subsequent contol and invesigation of supicous and gresombly compionce- relevant fats and eeunstances in die need of improvement. The BIRG HMO review, for example, was nota compete or considering the Intrtarenc fram the trading division, Independent analysis (TB Il, margin no. 190). The Investigation was ‘aeompete because te lst of Fearch terme ved forthe anaiysie of communications wae ot ‘pple consistently to all dat and to the entre peed Investigated, which constiutes 2 Aeviation fom a forensic approach (TBI, margin ne. 174). The Investigation was evidenty Tecomplete aso becouse the suspous communications. subsequently elscovered (of Hr. Bar, among others) wore precisely net detec In the communication analysis. The ‘explanaticn given by employees of DB to Mr. Rtchotte, who could not understand why the BIRG review had not discovered any indestons of BOR manpultions, was that many ofthe ‘splcous communketions hed been In French or languages other than English and had therefore not been lenined (18 Il, regi no. 58). EY fond tht the entre communteation ‘analysis (8 total of 830,000 documents) was conducted by Me Mulany alone (TBM, margin 10,61, who also analyzed the communiatios in French despite not having command ofthe language (TBH, margin no. 175). 1 botaves that the Involvement of Mr. Closte 2s head of the savestignted division in the lnvestigation by Intermal Aud can be regarded as conspicuous (TB Ml, margin no. 191). Consequentiy, the BIRG review dé notin any way constitute an Independant investigation by tema Aus‘cording to my opinion, no plausible reasons ae dscernibie why the head of 2 von which te belog ioverspated by Internal Aude snou ntrfere withthe preparaton of the report ta ‘pn extent which ie described a conepcuous even by employees of Interra Aud. This hale true al the more 50 for the fact that he glossed over cortants ofthe report, which si at, rot tolerable fom 2 baniciteral perspective, Sut even less so from 2 regulatory Perspective. This should also have’ been nosed by 08, since even the lawyers of Sloughter& May menceted by your lal cepartment arved st tie concision that Mr. Gee's changes ware to ba deemed as eupiemistc and aftervards required attenuation ‘by Ineeral Aude. Therefore, the statements made by Mr. Clete onthe BIRG compex tothe fect that he he not been competent to make ny changes othe BIRG report hardy sound ‘convincing 19. This also appears problematic considering the function Fld by Mr. Clete at oe. Besides Mr. Coste, 350 Mr Jan was interested in he preliminary resus ofthe BIRG review. In this cones, further conspicuous aspects can be estabished. It not comprehensible, or example, why eompllancerelevant resus of the revew were preserted to MJ on 30 November 2008 whieh were ept from the Management Boord In @ gresentation of '8 December 2008, although such information was provided subsequently on 19 January 2010 (781, margin no. 134), ‘The explanation given by Mr. Kahiberg for the long te that had bean naaded to prepare the BIRG report fs to convince. ‘There ls goed reason to assume thatthe delay was mainly de to the time-consuming ceordnaton of the daft report, In parcular with Mr. Coete Hr Goet's interference withthe preparation of report by Internal Aut, whlch went far beyond 2 legitimate coordination ofthe fet, deemed highly prebiemate parlcasry under regulatory aspects but cerally also under bankneemal aspects and leaves questions regarding his ole and reacting the reactions whch would, in fact, have ad tobe taken In sand Me. ds area of responsity unanswered, In January 2011, D8 untrwhfuly confirmed to the BOA tat 9 corresponding review ofthe LUOR submission processes nad had occurred In 2010 in accordance ‘with the OBA requirements (TOR), which was no te case (see TB Th, margin nos. 194 et sega.) With respect to personal responses forthe esuence ofthe inearect BBA confirmation Fr the {Year 2010, €¥arves atthe flowing condusions: Me Cute fram the GFF dvsion knew of the BBA requtemant fo conduct and subsequently confirm controls ofthe submission process 8 early os mid-2008. As # DB representative at BBA, he himself took part In meetings In Wich the LISOR-reated BGA requirements were cscused (TB Ii, margin no. 21). Further, ‘ne might have expected fom Mo, Hotta UX Reglanal Head of Group Aust one CTE Business aroner that she, follwing fecept of the BBA'S request for 8 cenfimalan of conte, woul have spent mare time dealing with the contents ofthe request ether thar with te questions 5 to who at DB should issue the confematon (TB Il, margin no. 32), 8 task nally eccomplised by Mr. ackson from the Complancedvsion (78 If, margin ro. 344). In ight ofthe fcts and aseessmenes set out above, in any be concked wth 2 view to the Moding explined Inthe Introduction that strct rsk management’ ond corel srwronment at al nas of defense, but in parcuar Inthe trading don sel (rst iw of defense}, at least would have significant Impeded, If not even ently precluded, any Improper conduct5) Further organizational lssves relating to submiscione In comeeton withthe bestnteral lavestigatlon of the ISOR processes the EY audtors ‘ave established furtier serous procedural decks beyond the numerous fcngs rerding such investigation that are ceserbed in the separate aut report that has been avaable (2 {ou for some time. In surnmary, such dei concern the handing ofthe communications. “egultory autores in connection wth your heel investigation 2) Reuters Dealing 3000, finds tat nota relevant sources of communication were taken inte accout in the courte of the bankIearal 1808 Investigation led by DB Lega or were made avalabie for thid-paty twestigavons (TE I, margin n0401). The reason for ths was tha nt al exting pltorms {nd software programs offering communicaton functions mere taken into account In the EHARS dota storage system, fram which te sources of communiestion used forthe intent TBOR investigation were exacted. This is ue to the fat that, prior to September 2013, ‘here was no uniform process for identifying platforms and sofware offering communicaten functions at BB and no peril checks oF EMARS had been implemented (78 Il, margin ro 108), The consttutes& stous omission for which various funtons and persons at 08 bear joint respons due to thelr own respective omissions. The omission I, fat of al attsbutable to the GTO divison, In whch the socaed MARS team was rezponsble for leaiying communication application ln EMARS (TBI, margin roe. 5384; 400). However, te team was not explety gven the task to also snr whether MARS compdsed all sources of communication (TB 1, margin no. 408). Despte the fat that Yas noinleations that GTO deliberately wie information for DB Lag nthe course ‘of the bankimeral 1BOR lovestaton an unrecorded communication appliations (TB margin no, 394), Me Altchote and the former Management Board member Mr Lambert have to face te allegation of not having mplemanted any corresponding meesues fer ensuring “completeness of EMARS Inthe belong Furtne, & must e estabishea tat tne Group Aut vision cla nox check me completeness ‘of te Communion data In EMARS, ether; Group AUGE was Inly managed Oy Mr Giles (2005-2012) and Me. Kaur (2011-2013) and thereaRer by Mr. Fab (Apri-ene 2013) and hr. Sewing (since June 2013) (TB HI, margin no. 386) Oni ater 08 obtained knowledge of [MARS being Incompete In 2013 were coresponding measures taken (amen other thins, conduct of on Internal and extemal investigaton of te creumstances of the completeness tf EMARS and intraduton of process for analyzing the communication functions of new software appilations) (TB 1, margin no, 387). According to E's assessment, such measures ‘were adequate ond gsl-arented (TB I, magi no. 408). 18 Legal ad not check the completeness ofthe sources of communketon provided by GTO ttther. As DB Legal was response for DB's Internal IBOR investigation, 3 Legal or the Managernen Board members responsible fr this ere (ul 31 May 2032: Dr. B&nager, since Uhent Or. Laithner) were therfore response for the Incomplete analysis of all relevant Soureas ef communication (TB I, margin nos. 392; 401). Eventhough, according to EY, there fr no face Indicating that OB Lega knew that EMARS was incomplete or that OB Legalaliperately excluded cetaln sources of communication from the benkcintemal 1BOR Investigation (TB 1, merpin fo. 383), considering the importance of the investigations, DS Lega would have been responsible fr checking the completeness ofthe source. However, In ation tothe foregoing and in adetion to EY's conclusion, 1 beeve that also the trading division tse” should have questioned whether all sources of communication were vase to 08 Legal the Eankinteral Investigation and to regulators i tel respective fexternel 1BOR investigations. On the one hand, Mr Jain and Hr. Clete, to, shout have been interested in completely and thoroughly cletfying the TBOR sues. The am should Nove been to eliminate any exstng dfiences atleast subsequently and to take corresponding organizational as wall as personne-elated measures. On the ster hand, wt lest Mr in rust also have been aware that, in the couse of external audts, DB would have to ive sttestatons of completeness ona regular bass fr which nthe spec IBOR Issue, be would ‘most aly have to share the responsi. 2) Deletion of auc es Contrary to the order lsued in May 2011 by the FSA, the Brish supervisory authority a the tie, to retain fer vestigation purposes any and al ata and infrmation on LIBOR, Welung telephone recordings avalale 35 fom 2006, auto les that were poertly relevent for the BOR inveregaton were destroyed in Duy 2012 (TB IL, margin nos. 428; 435 et cea). Even though EY comes tothe conclusion tat tere were no facts indicating tat these audio fs of the years 2008/2009 had been deleted elberatly and intentionally, the deletion I the resu. of deicencies In the relevant processes (TB Il, margin no. 481) whch T consier to be ferus. The deletion of hese le constuts an unacceptable event, beraute they related to facts which were relevant for carving the crcumstances underving the Investigations ad hich wre whe trom te review by varus supervisory autres. ‘ccoaing to 6's firings, the deletion was due tothe Fact that, although the IPY Voice Tesm, hlch Is part of GTO and responsibe for te retention cf audio Mls, hac been instuces Immeclately in May 2011 to exempt all audio fies avaliable with respect to the LIBOR {ubissons ftom the standard deletion process (TBI, margin nes. 417; 481; 448), the IPV Yoce Team assumed, however, that Wis Instruction ony related to the audio fle of the receding sbe months whic s the usual retention peredappliable a 08 for suc fies. Asa "esl, In uly 2012, aud Mes crpinating mainly from the years 2008 and 2009 ware delete Whlch'D8 hac retained in connection wth the Lehn ers and th contants of whlch might 2350 have been relevant to LIBOR (T I, marlin no, 449), The can oaly have been caused by defelence in communication at 08 as well as by a posible ack of or by an unclear leation af responilées, which mans tht there must be sever orgnizatona defi In this contest, Mr Lambert, who was the Management Board member responsible fee GTO atthe tme the Gata request was reclved from the FSA, must face te serous reprosch of not raving implemented adequate processes to ensue an appropiate data storage. On te other ‘and, T canna see any releare esponsblty on the par of Me. Renate considering at Ne had Been appointed tothe Management Board orl shrty befor, have noticed that you reacted to his incident in October 2013 and that, according to EY, Corresponding measures were taken immediately which are appopate (TB Tl, mara m0, on) Incorrect contant of the formation given to regulators onto the BA In various eases, DB gave incorect Information to requltors and to the BAA - for the mast part (Le. to the FSA, the FCA and the BUA) even knowingly. These cases constiute severe breaches of the euty to provide true and correct Ifermation to regulators, 8y order of 4 February 2011, the FSA quested tht you confi the approiatenes of your processes and controls relating to LIBOR submissions in pce a the tme; you were requested t confim that you had appropriate poles and rules in place that were Satisfactory to senior management. Thereupon on 17 March 2011, Mr. Andrew Sowter (Compliance) issued the writen canfimatin ~ whieh was incorect a: to Rs content ~ that Compliance had performed random contrat en, together wth Mr. Coste andr Nchals, fonsidered the processes to be appropiate, Mr. Coste stated inthis context to EY that he ad ot seen the confirmation a the ime, whereas Mr. Son Jacks tld EY thatthe da. version ofthe leter had been presented to Ke. Close and Hr. Wehols for review. AB regards ‘he contant ofthe confirmation, EF states tat n fact none of the controls specie In BA's TOR had been implementes unt mis-2011 (TI, margin ot. 939 wt seqa Fal margin sos, 347 et sea). You also made incorectstatomants to aFin In your lta of 23 August 20:3. In thet leter 1 BaFin, you stated that Mr. Cristian Bitar was not lavlved In the ISDAFIX (cf. tis “egord TB I, margin nes. 740 - 748 and TB 1, margin es. 194 201). The reason fortis Incorect information was that your intemal Investigations were superiel end insuficient 2th the Insucent banklntemal Investigation and your incorrect letter to BaFin of 3 August 2013 fll wkhin the responsiblity of Or. Lehner as the Management Bowrd member resonebie for Legal = and br Lawis 2 co-lgnatry (ef TBI, margin nos. 194 = 201). In connection with statements mode to regulators whch were Incorrect as to ther contents, ‘he incorrect 8A confematon f 12 January 2021 I oto be mentioned (se 2b0r8). Furthermore, the Incoract alagaton made by 08 to the FCA In 2013 - although not dressed inthe EY Report - ls leo to be sen in this content. OB Incerectiy Informed the FCA tot Bain hed proited the relent ofthe EY aud report of 22 March 2013 to the FCA. his Incorrect statement to FCA Is described In det bythe FCA in Rs Ora Waring Notice elvered to 08 on 17 March 2035 and in Rs Fal Notes of 23 Apr 2015 on IBOR, to whieh ‘efeence i made hereby. 1 goes wehout saying that, In my view, Incorrect statements to supervisory authories are totally unacepeable In any sirumstances and evidence cf an Intolerabe state. The sotement to he BBA too, Is problematic and an ndeation of avery poor complance cute Furthermore, ls nt cicerble tome tha there eves have been Invextiated and anayeed ce that eancuslene have baen drawn accordingly st DB, which would have been urgently veguled In mi view. 6) Proper ISDAFIX and XBR submission processes 2) ISDAFDK submission processes “The ISOAFTX submission process which was part of Mr. J's area of respenstlty, was ay Ineuficanty equipped and protected agalst manipulations, although since 2010 a the ites, ‘the date on which stemted manipuatons were ented for he ret ie witout nyconsequences (cf. 18 fl, margin no. 908), thare would have been reason to also examine tis aspect of the submissions. In this canted, isto be considered as particulary serous hat "Me Jon and the ether senor wanagars responsible fr GFF at 08 obviously did ne aw any cancusions fom previous event, In particular from the outceme and the analysis of the Investigations on reference-ates conducted 50 far, for themseves or for thelr respective areas of responsiblity even tiougn It was crystal clear that this would have Been necestry. In parccuar, prior to sting down te ISDAFIK submission by 9B Io Apr 204, te oul not be determined that Me. Jin, Mr. Fassola and Mr. lets tok all necessary action to estabish proper ISDAFIX processes. This means that Me Jain, Mr. Falsol and Mr: Coat dd not even react upon receipt of the Goin eter of 12 August 2013, | woul tke te point out agan inthis context that Oe Lehner = together wh Me. Lewis = responsible forthe incorrect Iformation provided by DB to Bafa In DBs letter to BaF of 23 august 2019 (In thls regard TB Il, margin nos. 740 ~ 746 and TS 1, margin nos. 194 = 201). Int lter, Or Lena sated thet Me Bitar hod not been invlved in ISOAFIX. He is ato resporibe for te Insuicient Intra Investigation of 08 on ISDAFIK underying ts Incaerec informacion (as regards the other IBOR submission poctses, see below in). Furtemere, Me. Walker, too, bears cespansily forthe ISOAAX svestgaton - whieh, £0 fac s complete and delayed In time ~ which ultimately was wot bunched unt ly 2012 Following 9 request by FSA (8 1, margin no, 166; 781, margn ro, 910}. “The ISOAFIX submissions for EURIBOR ISDAFIX and EUR LIGOR ISDAFTX with term of one Year were mice by GFPX, and ail ther ISDAFIX submistions wie mage by vans witha Gchal Rates. Global Head of GFFX was Hr. Qoete, Head of Gobal Rates was Mr, Falsoa ‘Mc, Cleate and tr. Falesola ceported to Hr. Jln, who, und NS appointment. to the Management Soard as of 1 Ap! 2008, In Ns capita Giozel Head of Gabel warkets ‘reported to Or. Ackermann. EY states thot, i 2010 or at an nkrown earlier point In time (7B t, margin no. 746), the trader Yong Hal atthe New York Swaps Desk, according to his own statement, changed the ‘valve of © USO ISDAFTX submision to Improve te postion fa DB option trader wih a clent (mee) (TB, margin no. 726). This constitutes attempted maripuaton. When Pnco compiines, the Reléent wos immaditely revealed. The super of Mr. Hal, Chuck Fetcher, fand the Initers superior, Me Thoms Hermert, were Informed (TB Il, margin 90. 755). ‘Apporeny onthe doy when the lsu became known, Mr. Fletcher Isued an oral warning tO "Me. Hak, Thee no writen documentation on this conversation. Mr. Fecher to EY tat, the te, there Nas been no formal poley on how to sanction such conduct, and that, ‘therefore, Information en ths Incsen:ac not been forwarded to wns or dvisons outside Global Rates tort Amerce (Head of Gabel Rates North America ar of May 2010: ‘Thomas Morente) (TB MI, marin nes. 722; 730 et seq.) Te was ro uth 2014 that he borus (of Mr al for 2013 was cut (TB Tl, margin nos. 722; 732); Mr Hal, however, sated to EY {hat he had abt been aware thet the 2013 bonus cut in 2014 had been tw consequence of Hs attemptes manipuleton i 20%0 (78 I, margin no. $20, Ne Ha's attempted manipulation hod no consequences such as process adaptations or Clsspnary measures. Ie was not ul 2013 tat sueh measures were taken (TB I, margin 0, $05),EY Found that, on 2 December 2013, the course ofthe IBOR Investigation, 2 conspeuous French communication relating to ISOAFIX bever Me. Bktar and Mr. Moryouse! detec 23 November 2009 had besa denied at DB (TBI, marsha nos. 757, 920) ‘This means Vat although DB had aeady had indications of possible misconduct of traders In cnnztion wth ISDAFIX I 2010 ond 2011, you reected to such eccatione wh te aay and ony upn receipt of corresponding Inquiisfrom regulators (TBH, margin no, 912). further concludes that your banicintemalivestigaons launched upon rece of inques from regulators were superil and Nad methodologies errors (TB 1, margin. 937). Your Investigations were fecused on answering inguias from reguators and dl rot alm at Conducting a comprehensive investigation on ISDAFIX mariputons (TB Il, margin ne. 92). (Overall EY consiers your investigations 2s reactive and incomplete (TBM, maria "9, 923). 1b) TBOR submission processes You aio fled to take sutcent measures to ensure proper functioning of ther 180R. ubmission processes as regards both timing snd quay of the measures. The fact thet, espe all sues and iedents tht nad happened before, you dé at Implement any sich measures atleast unl mid-2018 Is particularly serious in my view (TB, margin no. 1133). For examl, the report of DB Geoup Audit of 31 March 2014 on the Benchmark submission versght reven contalning intr ala one “cl issue", tree “eigncan sss" and three “importa sues” stil ports strikingly serious rings. tn this mate, parca Mr 2, ‘the person rerponsible forts area, should have been aware of the kay importance of broper submission processes under legal and rentatlonal a well s noni expects. Asn she ISDAFDC mater, the foc tat Me ain an the olne” senior manogers responsible for GFX at DB obvieusly ald not draw any conclusion from the previous evens, in particular Irom the outcome and the analysis ofthe Investigations on relerence rates conducted £0 fr, for themselves and for ther especie areas of responstty, eventhough was crystal tor that tis would have been necessary, is aso tobe considered as patculry serous. There is ‘specialy no indication that Mr. Jain and Mr. Coete obtained confirmations fem all ‘esponsible persons or unks tothe effect tat all necessary measures had been taken (0 {SEG proper 190R submission processes. tn tis canter, the aut report therfore comes to the concuslon that, t date, @ proper functioning ofthe submission processes cannot be cofrmed (78 Il, margin ne. 1137). As, the fect that ascplinery measures were ether not taken at a or not a2 may manner oF not ina cansinent manner eonstkites snether omision (Tt, margin nce 144% et se.) According to Mr Smon Dadee, OB cd not take any steps regarding the special LIBOR Submisson process unt 2013 despite already existing BBA requirements (TB 1, margin 0. 938). Such steps were not implemented unt mid-2011. The respons forts delayed reaction es wh Mr. Jan and Mr. Gos (TB, margin nas. 96 et se). ‘Th conclusion that the bank reacted fr too late to the event 1 also confmed by other prominent postions at DB (cf. TBI, margin nos. 951, 973, 978 regcding interviens with hr, Rithote, DF. Lethe ad Hr. Mugu). 7) attestations of completeness and other declarations and statements made to regulatorsIn ici cases, representatives oF OB often eld nat anewer fuly or corey to Inqules ‘and document requests by varous regulators due to insufclencis a organtzational level (73 1, margin nes. 625, 635). Whe BY, referring inter ae to ts frst I6OR specs audit completed in 2013 and to the at ofthe annual franca statements and the consolidated financial statements by KPMG i 2008 and 2012, concludes on the one hand that the processes relating to the Issue of aktetatons of completeness implemented at DB wit respect to formal aud appear to be appropriate and sutable (Te 11, marg no. 626), on te ether hand, the audrs ceserbe some cases Uehich cnsideaby tarish ths impression. Exempias are subpoene relating to USOR sent in 2010 by SEC and two requests by FSA and Bain in 2013 Inthe same matte, to which you replied Incompletly and in part even incarect (TB tl, margin nos. 631 et stag. This i totaly unacceptable. Al members of senior management must be aware tat signing Incorect or incomplete Information ~ in partculr, n combination with attestation of completeness ~ certain may have relevent legal consequences and, n particular gves cause to question ther relay, Te must have bean ces to all the partes volved that view of tha'impertance of the statements and declarations to be canlimed, an attestaion of ampletenessreqlres even moce comprehensive ard thorough proceies The requests mentioned above were processed wih the mate Invovement of the legal ‘epariment for whl, at Management Board level, Mr. Banziger was responsble url te and f May 2012 and, thereafter, Or. Leiner (7B Il, margin no. 630). However, must be noted that, according t the slgnatures, Or Letner an Mr. Lew were st last responsible forthe later to Fin of 23 August 2013 n which tay Ine la incorrectly stated tak Mr. Bar had rot been invalved in ISOAFIK (TB Il, margin ns. 619, 626). Senior Management Review ‘th regard to the roles as well as responilites of the individual persons In senor ‘nanagement the folowing conchsions can be reared already ths pene based onthe Senior Management Review prepared during the most recent aud by EY, whlch does net yet, Incude the fodings from the previous aud In the matter Invoiving BOR as wel as ether uals concerning the lnolved business ares, I concentrate onthe maln results with regard ‘the persons whe have Both departmental responsibly se well es overal respon. Trading Division neh 35in We, ai had the funeion 25 Global Head of Global Markets up to and ining March 2009, nd was 2 member of te GEC; he was subsequently response from 1 April 2009 to 2012 ‘or the area of label Markets as 9 member ofthe Management Board. Ha was accordingly iso responsible dese functions for the GFFX son and, tus, cect responsible fore Sivson which was responsibie at 08 for IGOR submisions and in which te racers that have een identi wth regard tw misconduct worked. i, dain became the co-chalaman of the Management Soard as of 1 June 2012 and & also -erponable In tvs Furcion fer, amongst ober areas, the ls of CBS which inlues the ‘Sobel Market cise. Due to the large number of charges Involving Mr. in as well as due to the substan Importance of de se ivsving “reference Wares ats" I conser Ue alures wi wishte Jan Is carpe tobe serous. They dsplay improper management and organization ofthe 2) Organizational environment ofthe GFFX avsion le Ja must be eherged wn the fact that there was an organlzaton and business ewronment in Ue GFF dWson, for which he was. responsible as the ‘loal Head of Gob Harkate uni 3k March 2009 and subsequent ar the member ofthe Management Board wth the responstlty fr CBRS, which favored behaviour Involving the sotto of confics of interests and that he Ignored ergalzatonal cuties under Set. 258 KWG i conjunction wth Mask a= well as ther provisions inthe ow, ao inlding Incorrect submissions. 22), ln created an environment by the physics and funcional restrctring of the business GFFK avin Inthe Year 2005, involving alg 8 change tothe seating oder ofthe "rading Foor in Landon which he nites and which was implemented by Mr. Cost, Ia which confets of intrest between traders and submitters arose or were strengthened (7B 1, margin nes. 113; 973; 260.874 et seq). Traders and submitters could communicate openly ‘eh each other In this environment that Red been created, and the consequence was that tracers and submters noifed each other about thee requests for LIBOR and EURIBOR submissions, These functions were also rot (8ny fnger) separated by “Chinese wal (TB, margin no. 875). 0b) Mr. in, 86 the super of Mr. Coste and Mr. Hchols inthe expenizaton, was also responsible for He. Coste and Mr, Micalls having lsued speci recive whlch promotes arrangements and appropiate conduct while gnorng coflets of Interest and compliance requirements JTS i, margin es, 668 ese). -) Mr. dln Ie ako responiia for the fat th the bonusdeven compensation systam ‘2nakaned a Pal-rven Interest on the part of traders In certain developments of interest rates or srengthened tuch interest and the fect eet the vedng strategy established by maragemant addtionaly promoted tis Interest (ef, TB I, margin nos, 126; 1250 et se). ©) Unbatence business cure ‘Jan hes organizatona esponsoity within 8 (unk! 32 March 2009 2s the Gaba Head of Gicbal Markets, subsequently as responsible member of the Management Board forthe ares BAS) for the fect that the GFFX dlvision wos characterized by a business cultae which Faced the man emphasis on an orantaton towards resus and mazimzatn of pots, ‘tout making sore that there were appropriate risk mentoring mechanisms. Mr. Jan waE formed 9a tines about the development ofthe busbess and the isk situation nthe GFX fivslon end hd repuar contact wth the MRM inthe cage of exceeding ite (78 I, Marga fo, 114), Furthecmore, Mr. Din elf Supported high sk pesiens In the OFFX dvison, at {mes conrary to the requeement of the MRM for @ reduction af rls. The conclusion must be crawn from ths that Mf. ain prortzed mavimzaton of profs compared to the requlrements ofthe monitoring units and assuring Nis responsbley for monitoring (TB, margin 0,135). furthermere, Mr Jen dd not pace efficent value on compliance by the employees Inthe GGFPX divslon. The focus in the GFFX division (ltr: FIC) was obviously onthe business figures and not on campllance by employees. £9. completon cf mandatory training Inthe[GFPX dvsion was cot effectively enforced, although Hr. Jin knew that his was not beng ‘ive te intend attention (78 I, margin no. 1268). ‘Te fact that there was 2 need to act with regard tothe euture inthe trading dlvisn aa apparent fromthe telephone all in june 2008 between tr Sin andr Arkermann Dr. Ackermann expressed In hs telephone call anger about “suture defcls" in Global Markets viens which he said he would no Songer tolerate becouse this uonecresely lendangered the reputation of the bank (TB 1, margin nos. 126; 1156), wich reinforces the Ings of EY and the present charges derived trom those Findings. Tis demand by the tchatman ofthe Management Board at tat time ard atthe same tne te person who wae resporsible forthe division should have been an immediate reason for ¥ Jain t examine and change the business cure, bt he didnot do so. He obviously tok a defensive postion In order to jusy the existing operations of business upto tat time, ‘According t0 an investigation by Olver Wyman In 2007, there were methodlopcal ‘weaknestes in measuring rs and defcts In montoring rk, Deutch Bundesbank (German Federal Bank) Kentfed a qumber of organizational and structural dees 2009, Inuaing eh apart prcesses fr mentoring market price isk, and Mekinsey alse rlsed objections In 2009 to the fact that expecially sucesrul business cvilons were not adeaustely Imonkored, The processes and responsibiies in cennecton with risk management were Dosiby not treated wth the requis respec or cared outwith the nacesary dedcaton Furthermore, the Mekinsey report proves inceations that risks were often underestimated In the business divisions (18 1, marge no. 923). Mr. ain Isao respontle for this a5 the ‘Slbal Head of Gob Markets (unl 31 March 2009) and as @ member ol the Management Board with responstlty fr the CESS (etring en Api 2009). ©) Bankcnteral investigations oF 180R submissions Mr. in ld ot ensue the ination of a comprehensive internal investignton ofthe 150R ‘vbmigeons atthe bank ein in 2008, whan he isarnea about rumors anddlecussions Inte Imarket concerning the suscepti of BOR for manipulation (e-, TB 1, margin ne. 105 {os; S11 at aeqg.), or In the year 2009 alter the MHD desk and expacialy the trader Chestan sitar had generated unusually high vading resus in 2008. Each ofthese aspects by sel, and in any even when viewed together, show that Hr. ala should have arranged for Such a comprehensive imeral vestigation at the bank already In 2008, but at the latest 2009, tn deta rain has been proven to have learned about dlicusion In the market conecring the ‘usepstity of the LIBOR to maniulaon In 2008 (C, TB 1, margin ne. 108). However, he {ha not draw any consequences for DB (in the form oF Investigation) 86 result of these rcleation in the morket (1B 1, margin ne. 112). The explansten provided by Mr. Jala fo EY Tors lack of active, according to which there was na mative fo: lowbaleg due to uty postion of DB at tha tine (ef. TBI, margin ne. 112), {nat convincing. In aden to the motive for “ewbeling", which loves representing the fquidty poston of the bank In @ more postive bgt, there was a further potentisl mote for incorect BOR submissions Consisting ofthe maximizaton of profits and, thu, bonuses on the part of traders. Ths {spect which has also corey been emphasized by some foreign pubic asthorties (cf. tachment A to the Deferred Prosecution Agreement ofthe Oo} dated 23 Apri 2015, margin 2. 18) mst aso have been knewn fo Mr. ain.At the begining of 2008, Hr. Jin aso had knowiedge about the high trading results oF the FHMD Des anc especialy ofthe trader star as wall a5 of his high Bonus enidement which wae preéominsntly based on the development of the 18OR rates. Mr Jn alco intersvly Supported tus eal of Mr Bitar for 8 bonur In 8 remarkable menner in Jenubry 2008 in 8 felephone ent De Ackermann hy raferng t9 hath Me. tare wal 8 Hr Maine ae” ood guys, they ae the best people on the street” a5 well as". he best guys we have got. ‘The telephone call proves that Mr sin not only knew Hr Bktar But had also promoted snd supported him. Me. Jln also knew the trading strategy and the trading results ofthe MD Desk andthe trader Bitar who was behind these resus athe abst rom 30 August 2007, Both he 180% discussion inthe yer 2008 as well asthe knowledge In 2009 about the high trading reauls for 2008 should have caused the inition of intemal Investigations at the bank concerning the involvement of 08 Waders in [BOR manipulations: in any ever, Dowever, Us resuts when viewing both aspects together. 6) Suspicion of making an incorec statment to the Deutsche Bundesbank ‘There Is susplion that Main might have knowingly made incorrect statements In his IBOR elated interview wth the Deutsche Bundesbank on 5 October 2012. Mr Join sated In Os lnterviw tat he stared having dubs about te ng ofthe LIBOR forthe fs ime nthe fest quater of 2011 and ta, n2008, he ad no knowledge abou te BOR ascvsions ‘the market or about dhe meeting wit the BBA in 2008 and the narnal scusion a te bank fon ths sue (TB 1, argh na, 110 and the Bundesbank Report dated 8 November 2012 fn Senlor Management, margin no. 38 and margin no. 13). However, EY determined that tir.2aln must have known about the IGOR dacussion Inthe market and te meeting atthe ‘BBA due to e-mails whch had been forwarded to him (ef TBI, margin. 108). Jala tres ta explain is ‘ocarrect statement to the Bundesbank to EY bythe fect that Ne Ws ony ‘ble to remember deal he tive after August 2008 (TB I, margin no. 111). However, is {doesnt explain why Hr. 23 didnot refer to his lack of memory already inthis interview ‘vith the Bundesbank and instead mage lncorract statements atthe tne, Therefor, 9 Mae ‘ready been mantiond, there Is suspicion that HJ could have knowingly rade Incorrect statements tothe Deusche Bundesbank €) Implementation of proper submission processes teal must face the reprimand that he fled In 2009 to make sure that 180R conto process were Implemented and thatthe messues whlch were finaly taken in 2012 were Inadequate. when tr. Jain became @ member ofthe Management Board as of 1 Apel 2009, (cesponsble for C585), ne not only procured that proper submission process and controls were Implemented (submission process and conzols were Inirocuced fr the fst time In 2011, abet inadequately). £¥ determined tha Wr. Jin would have been required to tok these measures 25 Head of Global Markets and, as of 1 April 2009, a5 member of the Management Board resporsible for CBAS, atthe latest starting In 2009 according to the B requirements for implementation of conirol procedures regarding IBOR submissions (TB t, ‘margin no, 122). EY alee found thet the measures taken In 2011 were insuicent (TB 1, margin 134) 1 BIRG review 22) Insufficient vestigation mandateNr. dln aso faces the allegation hat he dé not make sure that there was a spec search ‘so for potential acts of manipulaton ofthe TBOR by O8 tater n the couse of the BIRG ‘Te investigations inated inthe year 2008 (Broeksmit;BIRG) were insutcient. ‘The scope ofthe Broeksmit vestigation initted with rege to the high Bonus enlement of Mr. Bitar ‘was kes t9 examining whether the profs of the MMO Desk were real and had not been ‘Caused by fate valuations or lternal raneactone. The BIRG RMD vestigation iatructed by Me Richt, whieh Me Join approves, a insiicentn hat itd ot ielde the Bossy lof ects by DB traders to manipulate the IBOR. In this Content, Hr Jan failed to ensure that Baten ects of manipulation by DB waders were special checked ou nthe couse ofthe BIRG MHD investigation. ib) IRG presentation tothe Management Beard “The preiminary results of the RG vestigation were presented to rain on 30 Novertber 2009. Mr. in wae leo Informed in that context about conpance-eevant topls. Hewever, Hr. Jain dé net respond by demanding tet provisions on compliance be observed atthe MND Desk. To the contrary, the compllanceelevant tpics were not the sutjec of 2 presentation of the resuts to the Management Board on & December 2003. ‘Atough Hr. Jin cannct be proven to have exercised influence on the BIRG report EY finds that theres 8 connection in terms of tning between the presentation to Mr. Jain on 30 November 2009 and the removal of the complince-relavant toples by the time the presentation was neta tothe Menagerent Board on 8 December 2008. GF could not prove that Mr ain had exercised Inuence here (Ct, TB T, margin wo, 125; Tt, margin 122 et soa. 128 ets) 9) 1SDAFTK ‘Mr Jaln Is responsibie at the level of the Management Board that, In 2010 and 2042, Indleatons of mlconduct fh cannacion with the ISOAFIX were handled only in 8 reactive ‘manner upon recip of corresponding Inquires From regustos and wih substantial delays, ‘nd fr the fact tat OB fale to completly record and docanent the ISDAFTX submissions ‘rocesses and to desgnate spel rezponsibie persons (cf, TB, margin or, 135 e249) 1 is to be crlczed In parscular that MF. Jain eié not craw any or ony Insuicent consequences from the acs Invlving manipulation of the IBOR by DB traders regarding ISDAFIX about wich he had learned, i any event in mid-2911. There would have bean reason considering the issues known In eannacton wlth 182R from mié-2011 to obtain Confirmation thatthe submissions processes fr the ISDAFIX were proper and dd not have elects, This dk not occur. AS stated above, was not unl 2012/2013 that Investigation ‘easures and efforts to implement contrs started, although they Maly proved to be ‘msutable to predude the risk af maipulation, 1) Examination ofa submission processes with agar to suscepbty to meripuation ‘Me. Jan, who is, together with Mr. Ftschen, responsibe forthe Group Aust departs since TNs appointment as Co-chairman of the Management Board and as such was, In 2012, responsible that no compete, comprehensive. ard independent aut of ail submisson processes with regard to ther susceptbltyto manipulation a of the potenti nccatons of Specie manipulations within OB stil had not ocurred at less unl! October 2014. The Coneusion from this ercumstance is that no proper business organization pursuant toSec. 28 ofthe Garman Banking Act (KW) had been implemented atleast ut that pint in fame with regard tthe submissen processes at D8, ether the 1BOR issies should have necessary ed to 2 complete and comprehensive iovesigaton of al submission processes ‘io eepard to posites fer manipulation ) Competénes othe EARS system ‘te tain, 25 the responsible member of the Manzpement Board for the evant business sion, must face the alegatin that the communications platforms investigated In Connection with the intemal 1BOR investigation at OB were not examined wih regard to ther compteness, whichis why no all communications applcsuone were taken te secour, 2) consequances taken vr Jain must aso face the alegaton that there was basically no proper management with ‘egarcs tothe submission processes uni the auc by EY. It was expel; not possible to venfy that MY Jai Rad taken ail necessary action to eStblsh proper ISDAFLK and 180R, processes unt! Apri 2014 when DB stopped the ISDAFIX submissions o, wah regard to 1SOR Submissions, un at teas the mide of 2014. No consaquences have been taken with cepard ‘to personnel aside fom the Involved traders and a London manaper, aough there were ‘major orgonzatonl deficits here which enabled the eleven traders to engage In misconduct ‘the fst place, Ths ivotes not only misconduct of Invidual traders, bu major systemic ects for which nobody has been held responsible 50 far. Especialy In the case of 'dviuals who work in key postions at D, such a5 members ofthe GEC, an essential aspect Shou be the abslse nigetyof tase indus Alan closte uring the prod from August 2007 ul the end af May 2032, Nr, Clete was Global Head of ‘GFP and, ths, drecy responsible forthe divin which wae respons for tranemiting the ceference interest rats and In which tose traders worked who could be proven to have been engaged in atenps at manipulation. As of 1 June 2012, Mr. Clete became Co-Chiet Execuve Offer Asla-Pocite and @ member of the GEC. Mr. Coete was and is drecly subordinate t Mf. Jain in both eapacties and fell and fas within Mr Jan's area of sesponsty EY expressly pols out that In Eght of the very dose and Iformal communtations between Wr Nemo and his direct superior, Mr Clot, the possibilty cannot be precded that Hr Coet already knew about posie manipulation by employees of DB even prior to 2013. furthermore, EY conelides from the furter fact that Me. Nemo, eezordng this own ‘Ratament, always kept Hr Cleese lormed about te trading Svategy and We rk tat Was Taken, wth ths occurring on specie cceaslons and primarly personay bezavse both men hn ther ofcar clrect nest to eoch other Landen, tha knowledge of He. Coste about the ineucton from Hr Mehl Mr, Cuter in Oetsber 2007 ~ "make sure our labors are on the low side for al ceys.* ~ is even key and that Mr. Clete might even have personaly eves this ciretive (TB, margin ne.84). t agee weh ens assessment. Even without having fal certainty inthis respect, the roi of Mr. Coste mur be considered tobe problematic due to the above ngs. According to the dings of EY, Wr. Clete i oe sf the man persons respansle within the organization of OB for various orenzationl and procedural defi concerning the IBOR submissions ad the business environment in which the problematic submissions ane conmunleatens eros, This includes espetaly Mhdlags withregard tothe bankcnternsl monoriag mechanlms end thers manapement 2s wall as the fendi business cute. Overal his ales must be considered tobe serous inthis regard 8) Organizational envrenment Inthe GFFX division Wr Closte must frst face the allegation of the fac: that there was an organizational and business envrenment Inthe dvsion he led which fvored incorrect submissions or even made them possible nthe first place. He negigenty created a stuaton which favored the exploitation of conflicts of interes and overcome menkoreg machansms. He is ccorigly a east inirecty responsible for neorect submission nhs dion 22) According toa statement by the trader Stoenko, Hr. Cloete had responsibilty together With Mr. into whom he reported erect, forthe new organization! structure inthe GFX ‘sion which nad be consequence that cates of intrest: becween traders and submiters arose or wore srengtiened (TB 1, margin nos. 878 et seca, 973). Existing bares were ‘iminated inthis manner, and slmast ler the door was opened fer ealsion between teeters and submitters bb) Mr Coste, as the dlrect superior of Mr. Nichols, 1s also responsible for the fact that i. Nichols sued specie directives whieh promoted ealusin and improper conduc: wile confi of ieerest ond compliance requvements were Ignored (TB, margin nos. B68 et sea). ) Mr Cloete Is abo responsible forthe fact thatthe bonus-drven compensation system brokered or relorced an nerest onthe par of traders ln certain developments of interest ‘ates and that the wading svategy esablshed by management aditonaly prometed this Interest (TBI, margin nos. 875; 1255 et segg.: 1262; 1264; 1269), ») Imbalance in oe busines culture Hr. Clete response within the bank without tis precluding the responsible a ther people t ter levels = forthe fact thatthe GFFK cvslon was ciaacteraed by @ busiass ‘oltre whlen places prey on arlentaton towards the rests and maximising profes witout ‘ssurng respanliltes for matorng and appropiate risk control mechani (TB f, maria tos. 75; 164), Ha regularly ignored the exceeding ofits and Inceation fom the rk ‘management funcion concerning high risk postions which were reported to him eal In Sscton to the development of the P&L account by refering to lnstrictions ghen to Rim in telephone conferences. He also permitied Mr Bitar In the year 2007 to continue his transactions marked by high lk poskons as Inthe past ("Keep ging you gelng reat’; TL, ‘margin nos. 73 et sea.),” The responibltes of the supervisors in te alvin for which fir lost was respoaile were not leary communicated. The confirmations of the supervisors conceming duties and responses were not isued or were not timely. ir Clase oid ot negigenty fall to racagnie these creumstances, instead ne knowingly Igrored them, Furthermore, he did not place suficient Importance on the beheviour of his employees in terme of complance. "He knew, among other aspects, tet the completion of mandatory traning sessions In the GFFX division with regard to compllonce-eates Issues Was not Beng cefecvely observes (7B 1, margin no. 1168). Finally, according to an investigation by Olver Wyman in 2007, thera were methodtogcl ‘weaknesses inthe rk assessment and defies in isk montorng, and Deutche Bundesbankalso Identified in 2009 a number of organizational and structural des, nding with regard to the processes for monitoring market price risk. MeKinsey also objected 2009 tothe fact that especialy sucessful visions were net adequately checked out (TB 1, margin ae. 923). Ne Geta hed ofthe GFPX dvilon, le nae portly reenable ale fori wnder the spect of reasonably mantoving risk lathe dvsion. Bankciterel Investigations about the BOR submissions Mr. Clete fled to carry out investigations about possible manipustion«f IGOR starting ia March 2008 (at the time of te BIZ quarterly report) when he fist Iered about the suscepti ofthe 180 submissions to manipulation, but te atest sting in 2009 after lenming abost the IGOR discussion In the market and after the exorDtant profs wre {enerated atthe HMO desk within the GFFX dWvslon. His knowledge about and support of Wr. Bitar and his trading strategies aso play arle here, just asin the case of Mr Jai. The sredng profits would have required stronger and more in-depth mosting than actualy 2ecurred. Furtiermore, the dscussion about IBOR should have been a reson for Mr. Crete "> propose ar rigger an intel investigation In his dvson by the bank. In any event, Bath developments when viewed together and ao the reporting and communictons ste In ‘he GFFX dvson (above) necessary resulted in such a need. This fllonseepecialy fom che cose coordeation between Wr. Cloete and the Individual trang desks and the fnvtronment which he crested which permited communications outside of the necessary Dretections. Anyone who eliminates existing protections for the aoidarce of conics of terest must have an ever greater Interest it investigating ond preventing abusive condvet and rust demensvate corresponding Involvement. Mr. Coete dd ot Full hisresponsbty, sttough exactly hs would have been necessary and expected. «) Submision montoring processes Me. cloete, 25 the response head of the GFPX dlson, fled to develep and implement fsubmisslone monitoring processes (margin aos. 95; 946 et se.). Acsorlngto EY, thie should have occurred atthe latest starting in 2009. According to EY, the BBA rewirements woul have represented a reasonable basis (TB 1,margn 9095). The responsi fr this als ay ‘wes the representatives of 06 Inthe management of GFFX, le, He Jain and Mr Clee (TB Il, ‘margin no. 987) ©) BIRG review During the courte of Ye BIRG review, Hr, Cloetaimpropety exerci influence on the result of the nvetioaton by the ING team as what was actualy an lndependerecontel ody, oF Mr Cloete a least red to do so, He attempted in the context of numerous conautatons and comments on versions to place the Rengs nthe BIRG MMO report abou the business fr heh he was esponsibie n a bettar ligt (TI, margin nos. 78; 184). Although te changes Were migated by the BIRG team, his exercise of influence Is characterize In the curse of Your Inia lvertgaton az "aking the stnton appear batter (78 I, margin 9. BI). The Changes and requests or changes by He. Cowte are refered to by 7 a6 *notieabe™ tai). Ties tothe conduston that. ete had no ieeest nan unrestrained investigation of Dossile Improper stutons o Incrret developments, weaknesses or deft In hs elon tlc had to be corrected. He was obvious instead interested In defending and malnaning ‘is business ané managemene made tat existed upto that te, whlch ail nck attach great portance on toples such as business euture or eomplance.1 Stubborly maintaining the status quo of the LIBOR submission process Hr. Costa must be cncged withthe fact that he tok the poston within OB inthe year 2008 ‘accordance with de predominant view of exercising lence onthe BBA in sucha manner that the exlsing submission proeszes would be cangec as ite az possible (TE 1, margin res. 86; 795). He must face the allegation in tis respect that he Indvectypartcpstd In allowing the suscepbiy of 18 to contin to exist. 1) Completeness ofthe ENARS system tr Cloote est also ace the aegation tat the communications platforms investigated i the ‘ourse of your ternal I5OR investigation were not checked with regard to completeness, tee why not all communications applications were taken to acount 1) Sete of facts rising strong suspicions Frases the suspicion In ts discussion that Mr. Clete ad leaned even prior to 2011 sbout erential manipulation by employees of O8 In light of the very cose anc informa femmunicaten between Mr. Mchols and Mr. leet (TBI, margin nos. 84; 99). Mr Nkholls aways kept Mr. Clets informed about both te trading strategy and the risk that was taken te. tcholls spoke asthe cecasion needed ard vimarly personaly with Mr. Coete because es nad ther aieas In Landon dectiy nest each eter (TB Tl, margin nes. 84). Its very ‘ateue to conceive lo ght ofthis that Mr. Mehalls would Rave lsued a drective having he ‘cope expressed in his e-maln October 2007 ("make sure out lors are on the low side for al ees.) without prior consuzation wih Mr. Cloete or even a raciv from hi Since such a presumption can only be rebutted with great city due to the objective Inte and despite the dsputation by Mr. Clete, the quastion arses about the effects onthe postion of Hr. Coete, 0) Olcusion with Mr. Btar about termination ‘Ashas been dlscused above, the statement by Mr Barn a eter trom his attorney, which Ir Cloete nas cisputed and according to whieh Nr Clete fered Mr. iar inte context af tne cussions about termineton that he (Mr. Bar) had dore ncting wong and had tnly become te victim of tens! and external plc, are further ination Wat Mr. Cate {ould have kronn and approved ofr. tars acts of manipulation. However Emust be also Taken into sccount In my view that Me, Blea s pursuing personal Rancial ntress so Eat Ns statments mutt be evelusted under Wis aspect. However, the described statement of fac by Hr. Briar mutt be consiseed to be ofrter element of suspicen against Me leet Fanfare waders he aiscussee above, three of te four Frankfurt waders, Me Vogt, Me. Garapeaou and i, Keppaut, site In the couse of tele complains seeking protacion against termination that Mr Coste ad stated In a video conference on 2 February 2012 that no further dust ‘ould be razed, partly In ight ofthe then pending appointment of Mr. in a6 the cor (£0 of DB. er. Clete Is sated to have Ierally sal: "I wl dose thls box"; "T dont want {ny roses. Ansa is becoming CEO.” (Ct, TB 1, margin no. 882). Mr. Clee was stated to {ave ordered a reducson of bonuses as a fral punishment of the improperommunleatens/ects of manipulations and expressed that he also bare his share of responsibly when he sg, "We all need fo bear Our share.” (TBI, margin ns. 883 e509). ‘knough Me. Coste dsputes that he made these statements or he say tha: he doesnot have any rezallecton, the statement of the threa waders would have tobe condered core nd ‘canons of the face that MF Cooke Had no intrest in investigating the events or severly foctoning the Waders and instead wanted to get dof the matter os qulely #8 posable end at he was aware of his part of the responlty. An sleet of suspon seo finaly ‘emaingepeinst Mr. Coste night ths sepect. 10) Incorret reponse to FSA inguin ~atements of He Sinon Jackson fn Inquiry trom the Betish supervisory authory FSA. n March 2011 was answered In @ {estionale menner and ona Basis which cannot be verfied In connection withthe fle BBA {oofemation in the year 2040. The answering leter was supposedly submited to Mr. Coste 4nd approved by” ‘him, athough ne disputes this, according to an email fom Ne, Simon Jaceson In the year 2011 and according to a writen statement made to EY (TE, ‘margin os. 347 esq, and margio nos. 939 et sg.) However, EY corey rales doubts {out the evidentiary value ofthe statement by Mr Jackson Deca he denonstrably signed {he flee BBA contmaton in January 2011. Thus, the passiblty cant be preuded tat he 1 not state the th here eter (TBI, margin es. 351 et seq). However, tis Is aio ‘nother statement which burdens Mr. Coste 1) Statements of Mr Clase regarding IRS i, Coste’ statements about te exercise of nuance onthe BIRG review a relies doves about his Integr. He & quoted with making the statement that he id not have the sutorty to Ifluence the report due tothe Independence ofthe BIRG reort. However, ‘ac, 22 efferent dats were forwarded to him fr comments, and his changes had the nature oF plcng the situaon in a beter ight. Even W Mr Close stil dlspues that he exercised Inuence, EY concludes tht his statements on this polnt are “not very pause” (TB 1, srergin no. 167). I gra with ‘9 Condusion In the aggregate, there remain substantial elaments oF suspicion with regard tO the volvement of Hr. Clete. There ere numerous Indeatlons that Me Clste already Kew bout postble maniulstive setans wth DB with repard to IBOR pir to 2011. It appears Thely o EY that Mr Cloete als ken or even himself gave the Instructons to Istue the ‘recive from Mr Wehells to Nr, Curer ("make sue our lbrs are on te low sie fr all fey"), Even this were not We case, Mr. Coete woud at last be Inecy responsible for {he orgenlzaona parameters tha fovoured the misuse of IBOR submissions. Michele reissol Hr. Felaola was Global Head of Rates and/ar Head of Globl Rates unt) 31 ay 2012. In is potton, Mr Faarle was direct subordinated ta Mr. ain and was paced within te lates trea of respons. Mr Falisla was appointed Head of Asst & Wealth Management and became # member ofthe GEC on 1 June 2012,fF draws parteuer attention to the fact thet, 1 Baht of the analysis of the trader Shivani Mathur, cannot be exclded that Mr. Fossala has become avare of possble ‘manipulations by empoyeas of 03 areody before 2011, “ine misconduct for witch Mr. Fisoa is accountable, which relates primary tothe omission cf investigation measures and the fallure to remedy procedural defcecies, must be cassiied ts serous, This ales even mare because Mir Fassla (besides Mr. Goee) is one ofthe fale two menbers of DB's senler management for whom EY cannot exude that they nad teen aware sredy before ms-2021 of internal 16OR manipulations within the bank, +) Omison of tavesgation measures concerning the Submission processes ti Fataola must face the allegation that he fale, despite his senior postin win the trading dvision, to Inelate extensive Inestgaton measures concerning DB's submission processes areedy In 2008 at the latest, although he hod recelved 9 fst indaton In hugust 2007 ard severa lear inaleaons as of 2008 ponting at deficencies within the BOR fubmisson process and although, according to EY'sfndnge of 2008, he wa the person, hesides Nr. Coete, who deb the mest with the IBOR Issue as compared with the other selor management members, EY would have expected, for example, that M”. Fassia examined the causes for DB's low EURIBOR submissions mentloned by Me. Mathur inher anys In tary November 2006, ln parteular because, according to EY obsessment Mr. Faisal had Already Become aware of posse 1808 manipulations by DB employees by way of ths ral 1») No examination of the high tracing Income at an ery stage Furthermore, Me Fastlo most face the legato that he also filed to question the MO desk’ high tracing income by 2008 athe latest, considering the worementoned fact that he tad been aware ofan dealt wt possible IBOR manipletons Inthe market and within 08, bn pantaar 9s he wa also regulary informed ofthe Nigh rks In GFFK because he was 2 participant of the socal “oak eal” in 2007/2008 ae a he hed also been aware ofthat Aisie's busines strategy as of November 2008 atthe latest. «© Stubborn maining the status quo ofthe LIBOR submission process Addtony, Mr. Faletle must face the allegation that he took the postion, In accordance ‘wth te predominant view within OB i 2008, that infuence should be exercised on the BEA Ir such a manner that the esting submision process would be change as Iie as pose. In thie content, he must fece the alegaton that he indrety parcipated in allowing the susceptlity to manipuleton of 180R submissions to continue to elt 4) inadequney ef he ISDAFLX submision processes Furthermore, It must be neted that Mr, Foesl, i Ne function as Head of Global Rats, was response forthe adequacy of 2 major part of the ISDAFIX submission processes unt the tnd of Moy 2012, when ne was unable, however, to ensure fly. For example, the Global fates sivston under is lad onitted to fly record ena document the ISDAFIX submission Drocestes ord to define space responsible: end plement adequate controls. Moreover, here wae no proces in pace that could have Informed Me. Falsola immediately In 2010 of Sossble USD ISDAFTK manipulations by bis aff member Yang Hal. In general Inlatons of $essbleISDAFIK manipultons dino result i any consequences being drawn Inte frm of Srocess adjustments or changed responsible. Disciplinary or procedural consequenceswere not actualy drawn until mid-20:3, however only after Mr. Fassola had already beer 2ppobsed Head of Asset & Wealth Management and had become a member ofthe GEC, ©) Susplius fats asa rast of algatons bythe trader Ms. Mathur ‘At least some suspicious fects remain with 2 view to the allegations raed by Ms, Mathur the trading colesgues responstle for IBOR submissions within the Cat) Desk ly Fanfare such tat the earesponding positions could aso be taken Ino account within the framework ff T8OR suomissons. Ths Is because an intemal analysis performed by Ns. Mathur atthe tame around vie rumors about LIBOR's suscepubity to maripustion drew Mr. Flscas tention tthe fact that D6 had submitted EURIBORS sigicanty belaw the corresponding verage rates, Consequently; 1 hold the opinion that there are at east Indications alo with regard to tir. Fosola that he could hava been aware as ery a In 2008 of incorrect subrissons made by os. Dr. Josef Ackermann ‘As chairman ofthe Management Board, Dr. Ackermann was responsible, among other things, for the grouy's Corporate & Investment Banking (CIB) dision as of 1 January 2007 vat ‘31 March 2009, the date when his responsbtbes changed. As & consecuence, he we aso the head ofthe GFPK avon at tat ume. Furthermore, he Wa respond a Management ‘Beard evel fr the Group Aude function during the time rom 1 January 2011 untl he le 8 ‘on 31 May 2012. The misconduct for which Or. Ackemenn i accountable relates nest to omiting Investigation measures in the {GOR mattr and must therefore be eatldeed to be que Important. However, tt must be acknowledged that Dr. Ackermann Intsted discussions on tha “Ineral care already at an early stage, a last in 2008, ) Organisational resgontiy Dr. Ackermann, a& the Management Goerd member whe was responsible for the GFFK ‘awison, among other things, unt March 2008, must face the elegaton that he obvsty Fale to ook nto this vison suffclety to resize erat there ested sous structural and procedural deft, Tete dei, combination with insufesent canta pocesss, made It by Omission of improvement measures concerning the [80R submission processes Dr. Ackermann must futher face the allegation tha, In his futon a¢ Management Board member responsible for the Group Audit function, he faded to immediately order Comprehensive vestigation measures concting OB’ Internal IGOR submision processes titer ne had become aware of posse IGOR manpuatone by 8 trader of OB in @ meeting of {he Management Board at te end of June 2011. According to EY' Ming, he stead for the fist time erdered comprehensive Information on the then aleady ongoing Internal 1BOR Investigations only in February 2012, an eppronch thet EY puts in the temporal context of 1s anal general meeting May 2012, Incomplete recording of submission processesFally, must be noted that De. Ackermann, asthe Management Board member cesponsible for Group Auk, dé. not nate 2 camprenensive Independent review of all submission processes regarding their suceptibity to manipulation and postble indeatons of specie ‘manipulations within 08, whichis the reason, according to EV's assessment, why there wa5 to propery functioning burners organization of Group Aude pursuant to Sec. 258 (3) KWG vit regerd to the submission processes a that time, ether Group Audie, Compliance and Legal Dr. Stephen Leithner Dr. Letiner was CosHaad of Coverage unit June 2012, In whieh funebon he was not 2 member of seo management. On 1 Dune 2012, Dr. Lehner wos appointed Chief Executive Offer Europe (excising Germany and the UK), thus becoming © mamber of the Management Bodra, and wae siz responsible for HR, Legal end Compliance as well 35 Governmant & Regulatory fas. Untl his appelntment as a Management Board member, Dr. Letter had not dealt with the ltue of IGOR reference rates; he wot invaWved In analysing and drawing consequences frm the IBOR events since the time of his appointment to the Management Board ‘As Or Lever Soles the Management Board only as of 1 3une2012 and had not bean Involved in the events surreuncng TBOR belore tht date, he was nat responsible forthe ‘manipulations by traders of OB and thus also cannot be held accountable In this respec. Dr. Leiner mast face allegations in connection with the analysis ef, andthe consequences ‘row from, the events, whieh are, Nowever, less sercus than the allegations relate tothe Feeeaton of manipulation attempts 2) Incomplete business organization ‘As the Management Board member responsife for Complance as of 1 June 2012, Leiner mast fee the allegation that there was no complete and property functoning business ergeniation pursuant to Sec. 258 (2) KWG ln place for the contro ofthe submission processes forthe te from 4 une 2032; Group Aude made at least significant frings ‘uring several austs of materlal measures, such as the so-aled Complance Mentoring Program for LIBOR, EURIBOR and TIBOR. ') Defts of O's ner 180R Investigation ‘As the Management Board member cesponsitle for Legal as of 1 June 2012, Dr Lethnar has ban responsible for DBs Internal IBOR Investigation as ofthis cate In thls context, he Is secourtable for the dei of ts internal investigation of DB, whlch have been estabished by EY tothe fst aust repor of 22 March 2013, 1 refer tomy statemencs eating to EY's firs auc repre of 12 August 2013 is resect, €) Suspicion that statements made to EY were nt fly tr “There isthe suspicion that Or. Leer statements made In his Interview wth EY wer rot fully tue,” Os Lane panted out to Mr, Michel Golden Inn e-mal of Februsry 2013, whieh he forwarded to Mr Jan, that the LIBOR dscusions of 2008 and, in particu, the recommendations of te Fad ffom 2008 should not be mentioned to the press, because ‘otherwise the question could be asked why no one had reacted at that time (TBI, marin, os. 187; 687-691; 766). Ths lustrates that te LIBOR dlcusson thet occured inthe‘market in 2008 an the Fess recommendations could infact have been and would have nad to be, 2 cause for reacion by OB. Or. Lakhner was not able to recall his e-mal of February 2019 In either interview with EY, whieh le “suspleos" according to EY (78, margin no. 188). 1 hold the view thatthe suspicion of having made an untrue statement has not been cspled 4) Incomplete atetaion of completeness Dr. Lehner, ae the Management Board member responsible for Legal snce 1 une 2012, ‘must face the allegation that he lesueo an incase atestaten of completes elged by th regarding the analyz communication data to EY on 22 March 2013. Tt hed turned out later fn thatthe Reuters Dealing 3000 platform had not been checked witla the scope of DB's Internal investigazon. However, EY conclodes that OB Dasially ated ith due care when ‘sued the atesttion oF complotaness ad followed & prior process wren sung f The ilegaton raised against Dr. Lner Is not seus inthis regard 9) Incorec statement to BOFn and insutlet lection of the fects the Bikar ISDARX Dr. Lethe aust face the alegaton that - athough nt deloeratly~ he made an Incorrect larten statement to BaFin in August 2013. OF. Lethe signed a letter of 23 August 2013, lahicn was aderessed to me, In which he wrongly stated in response to fy request reparing ISOAFIX that there was no connection between Mr. tar and ISDAFIX. ‘Addionaly, DF. tethner must fare the ellgston that he Is eso response for the Inaufelent earieaton of te fects surrounding Mr. Slzar and ISDAFD, whch led to the Incorrect statement made to 8aFin. In July 2012, the FSA had asked for cacicaton of ornmunieation, which concemed ISDAFIX, between Mr. Bitar and a third. person (We, Mcyouste). Aso rest, OB carried out an investigation into ISDAFIC and conducted an Interview with Mr. tar in this context, but wihout presenting the elevar communication to him. Aecordiag to Es nding, the Invesugation related to ISDAFIX cared cut by D8 was Infora-incomplete and also only reactive, for which Dr. Lethner 25 che Individual wth epartmental esporsbiy is esponaie Richard Watker ‘As goneral counsel for te ani bank, & postion e had already been Holding since 2005, tue. Waker wae appontes to the GEC on I June 2012. A general coun. Waar was and Is drecty subordinated to the respective Management Board menber responstle for Legal, whieh was Or. Lethner during the peri fem 1 June 2012 unt theend of 2014, ‘he folowing ategations, if considered in aggregate, must alebdy be deemed gute slgniant because the undering findings had a rec effect on how OB Sek wth the IBOR 2) Falla to address and communicate TBOR issues suieney ls, Walar must face the allegation that he adrestec the BOR lsue only nsuffienty from an organtzatinal perspective, desplte corresponding Inleatons, andthe: Ne communicated felevant information frm Legal, the business division headed by Him, relating to the Submissions enly insult to you.According to EY, dspte receiving an increasing numberof Inquiries from regultors during 2010, tr faker for example ales to pay suit attention to te requests fr formation submited by the SEC and CFTC 1008 In connection with submissions. Furthermore, EY did ‘ot notice any stronger Involvement after a subpoena ofthe SEC of 4 August 2010 regardiog {USD L1GOR submissions of OB andi ght to ake a cal vew in this respect (TB 1, marie no. 827). At least the legal ratue of a subpoena should nave caused Wr. Walker In Ns capacity as general counsel to del with the Issues addressed there. Moraave, Me. Waker became aware on 29 March 20:1 of Mr. Nicholl manipulative e-nall communication that had been eicoveres several weeks earler. EY oid not find say Inceations that Me. Walker dvecty informed the Management Board thereof on Ns par. EY comes to the corect concison that this would have to be expected considering the imaginable explosiveness of the formation (TB, margin nos. 156 et seq. 629 et sen), because R was a dear sigh of IGOR manipuatons wihin the bank. The e-mail ‘communiaton aso was nt mentened inthe flowing meeting ofthe Management Board on 38.Aprl 2013, during which the lavesigations conducted bythe US authries SEC, CFTC and od against pane! tanks in connection wth alsged manipulations were adresses CConsaquentiy, Hr. Walker must face the alegaton that he has his share of respons for the foct that yeu, a members ofthe Management Boar, didnot adress the IBOR sue fearler. A rsicadequate handing of th subject would have required to row your, Le. the ‘Management Board's attention legal and reputational risks that cout arise for your bark, tee, at an eary stage. I appears to me that ths i manFesaton of part ofthe culture tat Ws possibly stil characterise to your bank, Le. to prefer hiding, covering up or entirely negating problems Instead of addressing them cpenly and acively In ores to prevent sar less nthe tute, ) Incorrect statement made tothe supervisors te. Waller Ig responsble for the fact that the communteton appleatons analysed by 16 Legal in connecion with the internal investigation cre out at OB were not reviewed for ‘completeness. AS a result, nota of the appliabons ware taken ito acount, for examole ‘the RO 3000 platform (TI, margin no. 259). As a consequence, he signed an attestacon of ‘completeness to be Issued to EY In March 2013 that was actualy inaccurate In ths regard (1, margin ns. 160 sea.). When ne sued the attestation to EY in ts function as service provider and adminisvatve assistant to the supervisors, he thus ultimstely made tne Ineorec statement aso to me. For this attestation, he ct ot assume responsity~ as can cecasionally be observed in companies ~ merely by hls signature and without any corer relation to the atested Issue. Rather, DB Lagal and tus Mr. Walker as divisional nebd had been functonally competent fer the Internal vestigation nd. therefore alo fer the completeness ofthe dete to be ansised. The divion eeu have flied ths responsi, by abezning a contmatien fom the techolal department, GTO (TB, margin nos. 159; 163). Fortermore, Me. Waber wes invivad In another incoract statement Isved to BaFn, when ‘you (DB) ote your reply to my leter Of August 2013 on the Incorrect statements made by Vr. eitar regarding his involvement in ISDAFIX submissions. Mr. aber bore overall responsibilty forthe Investigation (TB 1, margin no. 164), bat = Incomprehensibly = dd not obtain any thie party checks whether Mr. Star Indeed had not had any connacton to TISOAFIXsubmisslans, which could actualy have bean expected In view of fs postion. «) ISDAFE nvestgation|ly, Mr. Walker i responsible forthe fact thatthe ISDAFIX vestigation has 4 fr Bees ‘orried ur incompletely and wh 2 delay (TB 1, margin fe. 16). 1n my epson, however, there should have been a comprehensive Investigation of al ISDAPIK submission processes: wel befoe uy 2012, which s why Wr. Walker also bears a share of responsbity forthe fact ‘hat 8 proper Business organtation pursuant to Sec.25a KWG alé notes inthis are stefan Krause Hr. Krause hes been 8 member of your Management Board since AptI2008 and Cyt Finacial Officer since 1 October 2008, Moreover, between 1 April 2003. and 51 December 2010, Nr, Krause had departmental respons for Group Aud Me. Keaute's misconduct relates frst and foremost to inuflent nvestigatinlatieation of fac and a falure to remedy defects regarding IBOR and must be seen #5 quite serious. However, he cannt be made responsible for any dct involvement nor f:itatlon of TBOR. ‘manipulations. 2) BIRG review 4s the Management Board membtr responsible for Group Aut between Apri 2009 and December 2010, Hr Krause must fae the allegation thatthe BRIG review ofthe MMO Desk Carried ou In this period was insuficient io that found no Indeaions of (potenti) TEOR Imanipulatons when the commnieton wat analyzed In the context. Furthermore, # was posible for We. Gost (aso in the opinion f the extarnal law fern Paul, Ves) to exert Ssgiicantinflvence onthe results sated in the rated review report, which contrary tothe ature of an independent investigaton (one posto explanation for tls BIRG revew that must be dassted as Naved coukt ba that Mr Krave Rime deat th eon o 9 very ined exten, which he jstiiad, among eter things, by saying that he hod hod ether pris. Tis ial the more surprising tang Ito _secoune the fact that he hed already partcpated In January 2008 In dscussons en the high onus of Mr. Bitar, Le. shortly belore he took over the Greup AUS functor, which bonus depended Fst and foremost o the proft generated by the MMD Desk - Le. Fracsly cn what tne BIRG review wos meant oinvesbigete 1) Internal nvesigaons of 1808 submissions atthe bank Furthermore, Hr. Krouse must fae te allegation that he, asthe Managemert Board menber responsible for Group Aut, fled to implement perdi reviews of the OR submission processes at DB, s¢ wt alo prescribed n the BBA rules In particular with a focus en LIBOR, gains thle bockground, EY comes to the conclusion tat curing te oercd an whieh Mr. Krause was responsibie for Group Aud, that function did not have a proper business rgantzaton pursuant to See 253 (1) KNG. 2iek management functions or. Huge Binz From May 2008 unt ne left the bank at the end of May 2012, Or. Bnziger was 2 Management Board member and Chief Risk Offer wth departmental respons, ier ala, ‘or Lega and ComplianceDr Binalger’s misconduct relates fst and foremost to the incomplete and Inadequate Investigation ofthe ISOR tues andthe flue to remedy defect inthis regard as wel tO lncoret statements made to parts ouside the bak and, overal, must be Seen as serous 2) Omission of improvement measures conceming Maret Rik Management In is function as Chit isk Ofee’, Dr. Banaler must face the allegation that Market Rsk Managemen, which wat leo response for GFF, showed orpenizatonsl and structural {eflcxs in the period investigated by EY and that no adequata measures were Implemented to ‘emedy them. Mereaver, OF. Banger would Rave Been required, in the pinion oF EY, to tke ‘measures to remedy the defects established in the BIRG report with regard tothe PMD Desk. 2) Mating of ase statements As the Management Beard member responsible for Compliance, Dr. Baazlger must assume ‘esponsbity for the fact that fase statements regarcing the monitoring of submission breeesses and the proper functioning of submission and monitoring processes were issued by Compliance to ted parties (884, FSA) on several occasions In 2011, eventhough he was not rect involved In compli the lafrmation. Hes furthermore ao reproached of not having akan Suit measures af least In reaction tothe Incorrect mentoring confirmation issued the 68, ©) Omission of Improvement meesures concerning the submission processes Likewise, a5 the person responsible for Complance, Or. Banger must essume responsbty for the foc that hs funcon dé net tke adequate measures concerning the submistion processes after It had become known in June 2013 that @ 8 trader was suspected of [BOR ranpulaton. For example, paricpason in training sessions on the submission process ~ some of which had become mandatory ~ was not propery contol, and Ie was not un ‘orl 2012 that Complance ‘uldeines for the Implementation end monitoring of the submission proceses were published «ature to adress Inquest regulators in his functions a6 the Management Goard member retponsite for Leg, Dr. Banger must face the allegation that, until March 2012, be Glé not adress the inqulres by reguators that DB had stared to receive as of the baginning of 2010 and thet, according to his own statement, he forwarded these to OB Legal for reasons of Independence ~ @reeson that EY ‘ance understand In ght of his departmental responsibilty for Legal. Farthermore, EY Is furpised that even afer the search of your promises conducted by the EU Commision In September 2031, Dr. Banger ld not nite any futher ivestigntons, which EY woul fact have expected. ©) Completeness ofthe EMARS system finaly, Dr. Barager as the Management Board member response for Legal must face the alegtion that Lega dé not check the communications platforms investigated i the course of Your Inzernal IGOR investigation for completeness, which Is why not all communications "plications were taken nto account.‘Stuart Lewis ‘Me Lewis was appointed to DS's Management Board as Chl Risk Ofer on 1 lune 2012. Prior thereto, he had been the Deputy Chef Rsk Oficer and Chief Risk Offcer of the Corporate & Investment Bark and, unth 2010, Chef Cre Oe. Dr Leni! mitconduct Is ralated in particular to fare to Invesigns as well as to an Inadequate ciriestion of facts and 8 fare to remedy defects In connection with the ROR Iesves. AS, in the opinion of EY, there was at tines a volaton, inter af, of Sec, 258 (1) KWG in tis connection, this misconduct must, In aggregate, be seen 2s gute enous. 8) Nottcation of inquires by regulators had no consequences er. Lemls must face the legation tet, n fs postion ws Deputy Chie Rk Ofc and Chief Rik Offeer of the Corporate & Investment Bank, he was notiied cf the requests for Information egaring LIBOR by the SEC ac early 2s in January 2010 anc, a6 he Ninel has Stated, presumably took part in several telephone conferences of the Risk Executive Commitee regarding the ongoing internal Investigation, but subsequent failed to order oF inate extensive measures aimed at Wentfying potental malpractces In DB's IBOR sbmigeone by Incomplete recording of submission processes In his postion as Chet Rsk Ofer, since September 2012, fe has eso been the Hanegement Board member responsble or the tading-indepenent Benchmark Submission Oversight {8S0) function, which, however, dd not scned itl March 2014 In aabeing @ process to nsure that ll submizslon processes were fully recorded. In tie comecton, he Is also "esponsble forthe oct eat, ut the report was prepares by EY, fea rot ensured a O8 = {ust 2 lack of 2 uniform definition of te term “venchmare ~ thal reference rates were ‘eid to B50 and thus monitored by this function, and also tet reference rates outside the cesponsblity of the CBS division were not subject to monktoring by B50. Agalnst ts Dackground, EY has come to the conclusion that he evbmision procesee in Market Re Management, a vison uncer the responsollty of Mr Lewis, sé fot meet tho eta OF >roper business rgansation pursuant to Sc. 258 (1) KWG at eet untl March 2034. Falure to address submision processes and misconduct Furtnermore, Mr. Lewis must face the alegaton that, despite Ns responsibilty as 2 Management Gcard member and Chle Risk Offer, he obviously Gli not acess submission pyocesses and erly earler misconduct In connection with submisions et DB In = Sufcenty nvdepth manner, a least the past. For instance, i 8 letter of 23 August 2013, sant to me, Mr. Lewis confirmed that Mr. Bitar Rae net had any connection to ISDAFIX submissions ~ a statement that had tobe evoked about a yea later, 3) Incorrect statement made to Bain ‘Against the background ofthe above, Mr. Lewis must face the edition allegation that he ‘made an incorrect wettan statement ~ abet not on purpose ~ to BAFn in August 2013 Technical infrastructure functionsHe. Ritcotee was appointed to OB's Management Board as Chie Operating Offcar on dune 2012. Frlr tereo, he has been Co-Chlet Operating Ofer i Global Markets fom +2009 an then took the positon of Chie Operating Other of ths dvison ect afterwards, whlch postion he held ne 32 May 2032. Ta the connection, Mr. Ritzotte was aso ‘esponste for te operational management ofthe GFFX dion i 2009, whieh cision nae been entrusted withthe submission of the TBOR reference rates and In which the tracers worked ho were Mente’ wth regard to misconduct. As a Management Board member, ‘Me Richtee wae azo response for GTO as rom June 2012. in view of te Ricote’s aggregate misconduct and the saver there, which manestes frst and foremost by a fre to Investigate as well a5 by inadequate Investigation end Improvernent measures in connection with IBOR submissions, it must be stated tht his iieonduet Is of Serious nature indeed. However the fact ‘must not be dsregerded thet Me Riehl sone ofa very smal numberof people win senior menagerie who tok an cary interes nan lvestigation of the T80R issues a 2) Inadequate approach to fw-ballng ‘Me Rehtte must face the allegation that he cd not already intensively deal wth fow-basINg storing In acy 2008 (In fis then current pastion as Co-Chef Operating Ofer of Global Marke en, thus, operational head of GFFX), a phanomenon that was beng observed Inthe ‘market et the time, akhough this problem had infact been known to bia atthe time as fevidenced by an e-mail sent t Hr. Jain en 19 February 2009 and although he had had enomledge of the business strategy pursued by the GFX vision at least since November 2008. Against ths background, e could Indeed have been expected that Mr. Rlkeotte ~ in view of his postion and responstlty at the tine ~ woud Inkate broad Investigation measures whi "Ms" corporate division Io order fo Md Oto what extent I= baling or other IBOR related kreguartes were an Issue to be aderested also a OB by BIRG review 1k must furthermore be noted that Me. Rechotte had knowledge, es arty as fa ‘September 2008 of the foc thot Mr. late, a5 the pe'son rasponcble for GFP, was actively partpating in the preparation oft BIRG ravlew pore (TB lI, margin no. 103), a result fof whieh he must atleast have been aware that this could impart Independence ofthe BIRG review. However, E's audit repoct doesnot mention any intervention by Mr. Richotte in hs regara Inadequate Improvement measures reparcing the ISDAFIX submiston processes In aden, te Rtchotte mus face the allegation thatthe implerertation ofthe improvement ‘measures proposed bythe Business Saluton Group (8SG) regarding the ISDAFIK submission processes merely focused onthe USO ISDAFIX, whereas the HKD or JY ISDAFIX submission roceste, for exampe, were not vestigated a al, akiough DB employees would have been ie to manipulate them, too, and abough, I EV’ opinion, they would have had to be nvosigaced as wel 4) Completeness ofthe EMARS system Foal, Me. Rtchote, a6 the Management Board member response for GTO, must face the jagation that ror to September 2013, there was no wniform proces at OB fr identiying Dlaterms and software offen communicaton aptons and that no period checks as tothecompleteness of EMARS had been implemented resting inthe fact that nt al relevant dats ources were taken Into account In the bank's internal IGOR Investigation, Therefore, Hr Richt was responsible for ths malpractice for mare than 2 year, 1) Investgstions and measures ordered tn contrast, must be noted in favor of Wr. Reet that, in March 2009, he Instruct BIR to review the MMD Oask’s PAL accoure apainst the background of the profit shares existing at the time. Furthermore, fe took the suspioon of manipulation by the former wader Sullaume Acciph = of which he leaned in June 20:1 ~ as a Feason to Instruct BSG In July 2011 to record the submissions made by D8 (excep or LISOR) andthe contol exiting ‘this regard, which was followed, at the suggeston of tr Rechots, by a reulew of the ‘molementation ofthe resung measures in November 2011. ally, & must be noted that ‘he measures eventually taken In the GTO vison ~ for which Mr. Richotte had been ‘esponsble a the time = in 2013 t record the communicsion systems used at OB In EMARS sre sean by 2 as having been adequate and goa-orented. Hermann-Josef Lamberti uring the period investigated by EY unt he left DB on 31 May 2012, Mr, Lambert! was 2 Management Board member aod Chef Operating Offer with respensbity for Glbal Sourcing, Corporate RealEstate, I, Satiement of Trading ACOs and Human Resouces, Me Lamberts misconduct manly relies to Wis Insufient fvolvement in Investigation measures and inadequate business processes In the GTO dhision ~ for which be had responstity ~ which must be vewed as serious. Tt must aso be notes tht Me. Lambert ras the only member of DB's senior management who dé not consent fo elng questioned by m. 2) No involvement i aking organizations and personnel consequences Ie most be notes thet, despite is having knowledge of regulates Inquiries directed 3t 08 ‘rom March 2011 onwards, Mr, Lambert hse? ai not etvely paricate In investigating the involvement of 8 traders b potential IBOR manipulations. ») Completeness ofthe EMARS system furthermere, 95 the Mansgement Board member responsible for IT and, thus, also the GTO vielen, He Lambert ie rerponable for the fact that, unl he le OB, there wae no Instructions and rules In place at 08 regarding responsibly for the complete coverage of all ommuricaten platforms in EMARS, which meant, among other things, that nat all eevant ‘ammunleaten channels were taken Into account i the bank's internal 1BOR investigation. 19 the opinion of , there wat thus ro proper business organization within the meaning of Sec. 258 (1) KWG n the GTO division for coverage of the communication platforms used within OB ane the collection of ta contlnes therein. ‘ther Senior Management Review 1 eter to the alicusion in the aust report with regard to all ether persons in the Senlor Management Review. ‘As stated above, an overall ganization and busines environment Was crested In the GFFK ‘vison, whieh was responsible forthe I8OR submissions, a well as Inthe other mertonedAtasions whieh eininated contr elements and favored or even facitated the expiottion of ‘ones of bterest.alnough EY conchdes that there were no indiatons that current Or ‘oxmer members of the Managemen Board as wall = the GEC krew about manipulation by employees of DB pre to 2011 or had instructed employees to engage n such manipulations, ‘specially Nr. Jan, a5 the responsible person forthe dvso, 5 alleged to have created © Sisiness ‘nd arganation! environment whienfsvouree IcortectI80R submissions or even made such incorrect submissions possible In the fst place. The suspicion exits sganst Hr, Cloete and Mr Falsola that they already knew about manipulative acts 2 OB prior to O11, Furthermore, Hr. Goet, in his functon as former head of the GFFX division, has feclsive responsibilty for the business and organaatenal vironment of the 1808 suomisions. 1 ats conde 2 parvcualy serious aspect te be tht beth during the course of your internal Invertgations an when desing with the IBOR lave at D8, the conduslon mute be drown that necessary learning effecs were eter not obtained, o¢ the resting consequence re ‘ot suffer. This applies both to dean with regulators a well as changes Internal strucures and procedures. ‘he responsible Inlviduals especialy In the trading divson commited serous emissions thin Wier respective ress” of responsibilty whlch are not compatible with rope" ‘hanagemant and proper tusinese orgenlzaten, Proper management In these divslns id ‘ot even exit unl the sude by EY. In particular, I cannot be determine forthe tne period flor tothe ducontinuanee oF the ISOAFIX submission by DB in April 2014 and forth TBOR submissens unt atleast the mide of 2014 that tr Jain and Mr. Coete tok af necessary ‘eton fo establish proper ISDAFTX and IBOR processes ‘nave been astonished to learn in recent ments from the press tat the suggestion i that the aust by Bafa supposelyvesuted in cleaing the senior management of DB, especlaly Nr. ai, and that supposeaty no banking supervisory measures are expected In this regard. ight of this background Fexprassy want to point out to you Lat this not correct. From the paint of view of banking supervision, the fuling of obigstions for the proper ‘management and the personal, active Invelvement incase of manipulation play an aus ise ole for the postion of measures. 1 wl compl he results of my analysis wh the resus of other auds ofthe CBAS division and obtain a comprehensive pete about the evens end the responsiltes in ti business Sament In an overall assessment. {wll lio finaly examine the importon of banking Supersisory mensures. I 8m airebdy now ging you the posblity to comment on t's leer end to provide me with such comment wi the rast elght weeks, “The chaieman oF the Supervisory Board of your lnsttutlen, Or. Achletner, the EuropESN Central Bark as well as the Deutsche Bundestank, main off in Hessen, are reeling 2 copy ‘ts ler “Yours sincerely As representative (agnanure] Fravke Menke Cepartment Present [soa ofthe Federal Fnanclal Supervisory Author]