The LIBOR Scandal Caused Deutsche Bank’s Co-CEOs to Resign in June
Deutsche Bank AG is a facing a lawsuit in Las Vegas to stop the Germany financial institution from buying a 25% stake in Station Casino LLC. The Culinary Workers Union Local 226, which represents represents food-service workers throughout the Las Vegas area, is challenging the financial institution’s suitability to deal with funds.
In April 2015, the bank agreed to a pay a $2.5 billion fine to settle fraud charges which were brought after a joint investigation by officials from the United States and the United Kingom (the “London Interbank Offered Rate” or “Libor” manipulation scandal). Deutsche Bank AG admitted to manipulating the interest rate of the Libor. The Libor is a benchmark for investors and lendors around the globe.
Fitschen and Jain Resign
In June 2015, the co-chief exucutives, Juergen Fitschen and Anshu Jain, agreed to resign their positions with the corporation. The two had angered shareholders to the point Fitschen and Jain could no longer lead the financial institution.
Union Workers Question German Company
To the Las Vegas workers union, the admission of guilt, the record fine, and the executive changes brought into question the multinational bank’s worthiness to be involved in the Las Vegas casino industry, which is under a special burden of scrutiny by US federal officials. Industries which handle a lot of cash, such as the casino gambling industry, are under more scrutiny for white collar crimes like fraud and money laundering.
To highlight their concerns to the state’s gaming officials, The Culinary Workers Union sent a letter outlining Deutshe Bank’s perceived issues to A.G. Burnett, Nevada Gaming Control Board chairman, and Tony Alamo, Nevada Gaming Commission chairman
AG Burnett’s Statement
AG Burnett, in an email released for public consumption, said on Wednesday, “When someone presents us with information alleging that a licensee has done something inappropriate, we independently investigate that. Here, we have not reached any conclusions.”
Though the email suggested Burnett and the Gaming Control Board were doing what the union asked, but he seemed to be pointing out to them they were asking him to do a job he obviously had already done.
Station Casinos IPO
The owners of Station Casinos, Frank and Lorenzo Fertitta of UFC fame, are considering an initial public offering. Financial analysts believe the gaming company, which owns 21 casinos, could be valued at as much as $3.5 billion, with $2.17 billion in debt. Deutsche Bank owns a 10% share in the company, which is estimated to be worth $337 million.
Deutsche Bank collected that 10% share in a 2009 bankruptcy court reorganization. But the financial institution, which is based out of Frankfurt, Germany, wants to invest enough money to own 25% of Station Casino stock.
In a way, the workers union is calling into question the trustworthiness of the international financial system. Few financial companies are larger than Deutsche Bank, which has 100,000 employees in 70 countries worldwide.
Planning Friday Protests
The Culinary Workers Union Local 226 and the Bartenders Local 165 plan to picket Station Casinos headquarters on Friday. The two union chapters, which are affiliates of the UNITE HERE national union, are calling for protests of the Deutsche Bank connection by employees of all 21 Station Casinos properties.
Maya Holmes, a research for the 55,000-member strong union, said in a June 17 letter, “We are gravely concerned about the suitability of Deutsche Bank to hold, through a subsidiary, a 25 percent equity stake in Station Casinos.“
