Deutsche Bank transfers $6B by mistake to a US hedge fund client

According to Reuters the money was recovered  from the US hedge fund client the next day and the error was reported to the US Federal Reserve, European Central Bank and UK Financial Conduct Authority. 

The transfer was said to be processed by a junior member of Deutsche's forex sales team in June while his boss was on holiday, according to two people familiar with the matter.

The junior staff made the mistake in getting the meaning of "net" and "gross" wrong in that instead of processing a net value, the person processed a gross figure and that meant the trade had "too many zeroes", said Reuters.

Deutsche bank was reported to have declined to comment on the incident.

The question that is being posed by financial media in respect of the $6 billion error is that why the error was not spotted under the bank's "four eyes principle" which requires every trade to be reviewed by another person before being processed.

Bank insiders said such mistakes were surprisingly common but ones of that size were rare.

According to the Guardian, two of Deutsche Bank's co-chief executives, Anshu Jain and Juergen Fitschen, resigned in June over missed profit targets and missteps, and were replaced by new co-CEO John Cryan.

It also reported that the bank is mired in roughly 6,000 legal cases and received a record $2.5bn fine in May for its role in rigging interest rates.

Reuters reports that Deutsche Bank Germany's biggest bank is restructuring its business, splitting its investment bank in two and have parted ways with some of its top bankers as the new chief executive, John Cryan, sets out its most "fundamental" overhaul.

Deutsche Bank reported a record pretax loss of 6 billion euros in the third quarter and warned of a possible dividend cut earlier this month.