Resurfaced financial scandal tarnishes Deutsche bank chief’s untainted image

The CEO of Deutsche Bank, Christian Sewing, is facing serious allegations from the past. At the center of the issue is a financial scandal involving complex derivative transactions with the Italian bank Monte dei Paschi di Siena during the financial crisis year of 2008. The deals, internally known as "Santorini" are currently casting a shadow over Germany’s largest financial institution and Sewing, who has been credited with restoring Deutsche Bank’s reputation and performance.

As an article published by the Spiegel publication dedicated to the scandal words it,  Sewing's journey is one of transformation. Starting as a bank apprentice in Bielefeld, he worked his way to the top over 36 years. Under his leadership, Deutsche Bank saw a remarkable recovery, with its stock rising 51% in 2024 alone. Sewing successfully distanced the institution from its scandal-ridden past, focusing on stability and profitability. But just as he seemed to have secured his legacy, past dealings involving the bank and the Italian lender Monte dei Paschi di Siena are resurfacing—with Sewing at the center.

The controversy concerns complex derivatives trades conducted in 2008, known as the “Santorini” transaction. These deals allegedly involved manipulation of financial statements, regulatory deception, and significant risks to Deutsche Bank’s reputation. In 2019, several former Deutsche Bank employees, including Dario Schiraldi and Michele Faissola, were convicted in Italy over the deals but were acquitted on appeal in 2022.

Now, Schiraldi has filed a lawsuit in a German court, seeking over €152 million in lost wages and bonuses. He argues that he and his peers were unfairly blamed for the scandal, while senior executives—who allegedly knew of the deals—escaped scrutiny. More former employees are expected to file similar claims in the UK.

Central to Schiraldi’s claim is the accusation that Christian Sewing, then the Head of Group Audit, knowingly helped mislead regulators to shield top executives. The lawsuit alleges that Sewing acted under orders from higher-ups to frame lower-ranking staff, including Schiraldi, as scapegoats. This was supposedly done to protect the bank’s image during a period of intense regulatory pressure. The 154-page lawsuit accuses the bank of resorting to “desperate and criminal measures” to maintain its financial standing and shift blame away from management.

The publication predicts that these allegations, if true, would dramatically tarnish Sewing’s image as the clean-cut leader who turned the bank around. They also raise serious questions about corporate accountability and transparency within Deutsche Bank at the time. Sewing, who now earns nearly €10 million annually, is portrayed in the lawsuit as a compliant figure who prioritized orders from above over his duty to act independently and critically as an internal auditor.

According to the article, Deutsche Bank denies the allegations and calls them baseless. The bank insists Schiraldi bears primary responsibility for the Santorini transaction and claims it has defended itself thoroughly in legal proceedings. The lawsuit appears designed not only to seek financial redress but to rehabilitate the reputations of former employees like Schiraldi and Faissola—possibly at the expense of Deutsche Bank’s current leadership.

By Nazrin Sadigova