Deutsche Bank’s Co-CEOs Juergen Fitschen and Anshu Jain Announced Their Resignations on June 7, 2015 as a Result of the Scandal.
The Las Vegas Culinary Workers Union has called on the Securities and Exchange Commission to require full disclosure of Deutsche Bank, one of the key stockholders in Station Casino Corp. The owners of Station Casinos is registering for an Initial Public Offering (IPO) and the workers union believes such a key partner needs to be provide transparency, given the international scandal the German-based bank is weathering at themoment.
In the union’s letter to the SEC, it said Station Casinos did not disclose in its IPO filing that a subsidiary of Deutsche Bank is the subject of an ongoing criminal investigation in the United States and abroad. The financial institution also had a subsidiary which pleaded guilty in a US court to criminal wire fraud in the spring of 2015.
Maya Holmes, the Culinary Workers Union’s director, told Business Wire, “We were surprised that Station did not disclose details in its filing about a growing controversy over how the corporate parent of a felon who paid more than $2 billion in fines after breaking federal law could continue to own their Nevada casinos.”
Station Casinos Profile
Station Casinos LLC is the owner of 19 casinos in the Nevada locals market. It also manages two Native American casinos elsewhere in the United States. Station Casinos is a family-owned business, controlled by the Fertitta Brothers, who are famous in the sports world for their ownership of the Ultimate Fighting Championship (UFC).
The Fertitta’s plan to take Station Casinos private with a leveraged buyout in 2007 was ill-timed, due to the subsequent real estate market crash and global recession. In 2009, the company filed for bankruptcy. Coming out of that bankruptcy case, Deutsche Bank owned 25% of the business. After digging out of debt, the Fertittas want an IPO to raise the capital to buy full control of their family’s business once more.
Nevada-Based Workers Union
The Culinary Workers Union, which places many employees in the Station Casinos, is concerned that the Deutsche Bank scandal could harm business, if it is undisclosed before the IPO. Its contention is the Nevada gaming industry is highly-regulated, so the financial crimes the German banking consortium is accused of committing is a major issue. In violating federal law, the workers union says Deutsche Bank violated Nevada law, too.
AG Burnett on Nevada Law
In saying so, the workers are throwing words in the face of a prominent Nevada gaming official. That was the stance taken recently by the Nevada Gaming Control Board Chairman, A.G. Burnett. In September, Burnett told the The Wall Street Journal that those who break the federal law in Nevada are also breaking the state’s law, for the aforementioned reasons.
While discussing a $9.5 million fine assessed by a division of the Department of the Treasury, FinCen, Burnett said, “When you violate U.S. federal law, we’re not going to let that harm our reputation.”
In specific, the Nevada Criminal Code states: “The continued growth and success of gaming is dependent upon public confidence and trust…that gaming is free from criminal and corruptive elements.”
Deutsche Bank Scandal
The concerns stems from a scandal which cost Deutsche Bank $2 billion in fines to the governments of the United Kingdom and United States. Those governments found that the German financial institution in illegally fixing global interest rates. Several of the bank’s executives have resigned amid the scanadal.
Despite the previous fines, US authorities still have two unresolved investigations into the financial institution’s various alleged crimes. One investigation is probing to see whether money laundering took place through Russian proxy banks.
Possible Consequences
If Deutsche Bank were found guilty of new crimes, the 25% equity owned by the company could become subject to sell on an altered timeline. Such a sell might happen without a waiting period or regardless of existing lock-up agreements. Also, Station Casinos could become subject to fine or other sanctions by the Gaming Commission, which could affect jobs.
