Deutsche Bank is initiating an investigation into the engagement with some customers

(Reuters) – Deutsche Bank AG said on Sunday that it had begun an investigation into the engagement with some customers after the Financial Times reported earlier that the German creditor was investigating the alleged sale of investment banking products.

“We have initiated an investigation into our engagement with a limited number of customers. We cannot comment on the details of the investigation until it is completed, “a Deutsche Bank spokesman said in an e-mail statement late Sunday.

The Financial Times reported that the lender checked to see if its staff had mis-sold sophisticated investment banking products to customers in breach of EU rules and then worked with people from these companies to share the profits.

The internal investigation was triggered by customer complaints last year, the newspaper reported, citing people familiar with the process, adding that the investigation initially focused on the Spanish office, which sells hedges, swaps, derivatives and other financial products.

An audit found that the bank incorrectly classified client firms in accordance with the rules of the Markets in Financial Instruments Directive (Mifid), which require banks to separate their clients through levels of financial sophistication, according to the newspaper.

Sources told the newspaper that the creditor believes that some of his employees knowingly sold inappropriate or inappropriate products to customers who might not understand and take the risk they took with these positions.

The investigation, called Project Teal, also examines allegations that there was collusion between German bank employees and the staff of customers who bought the wrong products.

The scope of the investigation was later extended to the rest of Europe, but it was believed that only customers in Spain and Portugal were affected, a source told FT.

The probe is nearing completion and the bank will soon have to make final disclosures to regulators, the newspaper said, adding that the bank’s primary regulators, BaFin and the European Central Bank, have been informed.