Italian prosecutor probes Deutsche Bank for possible market manipulation

A statue is seen next to the logo of Germany's Deutsche Bank in Frankfurt, Germany, January 26, 2016.    REUTERS/Kai Pfaffenbach/File Photo

An Italian prosecutor is investigating Deutsche Bank (DBKGn.DE) for possible market manipulation regarding the sale of 7 billion euros ($8 billion) in Italian government bonds five years ago, an investigative source said on Friday.

Deutsche Bank said it was cooperating with Italian authorities and had given information to market regulator Consob about a related inquiry in 2011. It did not give any further details or comment.

The German bank sold the bonds in the first half of 2011 as Italy slid toward a debt crisis that eventually brought down the government of former Prime Minister Silvio Berlusconi.

A prosecutor in Trani, southern Italy, is investigating the fact Deutsche told clients in a research note in early 2011 that Italy’s public debt was no cause for concern, and then sold almost 90 percent of its own holding, the investigative source said.

Five former Deutsche Bank managers as well as the bank itself are under investigation in the case, the source added.