The regulator said that in order to gain profit from speculative positions, German lender sold $2.2bn worth of stocks listed in the KOSPI200, which they had purchased through index arbitrage trading.
FSC added that through this manipulative orders, KOSPI200 index plunged 2.79% (254.62p ?247.51p) and German bank pocketed profits of $40.5m through the link between spot and futures (options) transaction.
According to the regulators, the market manipulative transaction was made with major involvement of ASG team in Deutsche Bank Hong Kong branch, however, the involvement of its headquarters, Deutsche Bank, was not confirmed.
According to the Seoul regulators, their investigation found evidence of involvement of senior officials from Deutsche Bank in Hong Kong, New York and Seoul.
FSC said the ban effective April 1, would impact the over-the-counter derivatives trading operations and proprietary securities of the German bank’s local brokerage unit.
In response to the South Korean regulator, German bank said it is disappointed with the allegations towards its employees and their involvement.
The German bank said that it will cooperate with the South Korean authorities in relation to the investigation.
The bank added that it will constitute an independent a commission to review of its Asian Equities Absolute Strategies Group systems and controls.
