Deutsche Bank Hit with €152M Suit Over 2013 Monte dei Paschi Audit - Sewing to Face Frankfurt Trial in December

Christian Sewing is back in the headlines - but this time it's not about quarterly results. Sewing, who now runs Deutsche Bank (ETR: DB), is facing renewed scrutiny over his role more than a decade ago when he led an internal audit of complex trades tied to Italy's Monte dei Paschi.

The drama reaches back to 2013, when Sewing was chief auditor and was tasked with probing derivatives transactions that later became an international legal headache. One of the bankers involved, Dario Schiraldi, has lodged a €152 million claim against the bank, arguing that he and several colleagues were unfairly blamed - and that the audit overseen by Sewing helped steer that outcome.

Key points in the file: the trades were the subject of an Italian conviction in 2019 that was overturned in 2022; Deutsche later reported the matter to Italian regulators in 2014, alleging "insufficient and selective disclosure" by the deal team; and the bank's own recent internal review says it found no wrongdoing in how the matter was handled at the time. The dispute is listed among potential legal risks in Deutsche Bank's 2024 annual report, and the bank's supervisory board has publicly backed management in defending the case.

Schiraldi's suit claims the audit had a foregone conclusion, relied only on a sliver of the available material, and let senior management off the hook while the deal team took the fall. His lawyers have pushed for disclosure and obtained millions of emails and documents they say expose gaps in the original handling; those records are part of the evidence the court will consider.

Deutsche Bank's response has been firm: the bank says the audit identified "material failings," but that the review itself was comprehensive and independent and that executives "discharged their responsibilities appropriately." Sewing, who approved certain deals earlier in his career as a credit officer, has not commented directly through a spokesperson.

There's a timing angle worth noting. Sewing has been credited with steering the bank back to profitability since becoming CEO in 2018 and was recently reappointed for a third term. That turnaround has been central to the bank's public image and its role in Chancellor Friedrich Merz's industrial push.

The legal showdown is scheduled for a Frankfurt courtroom in December. Whatever the verdict, it will publicly re-examine decisions taken during a turbulent era for big banks - and put management's past judgment under the microscope just as Deutsche Bank is trying to look forward.

Will the December hearing change how markets price the bank's governance record? That's the question now on the table.