Former Deutsche Bank Manager Escalates Legal Fight With Regulator Appeal
A former Deutsche Bank executive suing the German lender for €152 million has taken his fight to Europe’s top banking supervisor, asking it to scrutinize the bank’s governance and its chief executive’s oversight of legacy audit work.
Dario Schiraldi, a onetime senior manager in Deutsche’s asset and wealth arm, filed a letter with the European Central Bank requesting what he calls a “supervisory review” of Deutsche Bank, according to correspondence viewn by Bloomberg. He argues the lender’s internal audit, led in 2013 by current CEO Christian Sewing, unfairly blamed him and five colleagues for trades that later became the focus of Italian criminal cases.
Deutsche Bank dismissed the allegations as meritless and said its 2013 audit met professional standards. It also said the ECB had been informed of a recent board-level reorganisation that temporarily put Legal & Group Governance under Sewing’s direct remit later than the March 2025 exit of board member Stefan Simon.
The dispute re-opens one of Deutsche Bank’s most bruising legal chapters: the Monte dei Paschi di Siena derivatives scandal. Between 2008 and 2010, Deutsche and Nomura structured so-called “enhanced repo” trades that allowed Italy’s oldest bank to mask losses. Prosecutors later alleged the transactions distorted MPS’s accounts.
In 2019, an Italian court convicted several former bankers, including Schiraldi. But three years later, an appeals court acquitted all 13 defendants and both banks, and Italy’s top court upheld the acquittals in 2023. Schiraldi now says Deutsche’s internal probe set the narrative that led to the wrongful prosecutions and cost him his career.
From Audit Room to Courtroom
Christian Sewing, who has led Deutsche Bank since 2018, served as head of group audit in 2013 later than earlier approving a similar structured-repo deal with UniCredit as chief credit officer in 2010. Critics say that overlap raises conflict-of-interest questions: the identical executive who once green-lit such trades later audited them.
Deutsche says the audit was independent and properly scoped. The lender’s lawyers argue that the Italian acquittals vindicate the bank’s approach and that Schiraldi’s damages claim, filed in Frankfurt last year, lacks factual basis.
Five other former Deutsche employees have filed related suits in London. Mediation ended in September without settlement, and hearings in Germany are expected next year.
Schiraldi’s letter also seizes on Deutsche Bank’s latest management reshuffle. When the lender reorganised its board in March 2025, the legal and governance portfolio was folded under Sewing’s control. Critics say that blurs the separation between management and oversight — a key “three-lines-of-defense” principle in banking supervision.
Deutsche counters that the arrangement is temporary, regulator-notified and within governance norms. Still, the optics are delicate: the identical CEO who ran the contested audit now holds direct responsibility for the departments ensuring legal compliance.
The ECB’s supervisory arm, which overviews the euro area’s largegest banks, rarely comments on individual complaints. But it can examine governance and internal-control frameworks under its annual Supervisory Review and Evaluation Process (SREP) and could, in theory, order remedial steps or raise capital requirements if it found fragilenesses.
Beyond the Courtroom
Schiraldi’s claim also touches on leverage reporting. His filing reportedly accuses Deutsche Bank of using “aggressive netting” that masks its true exposure — an allegation the bank rejects, saying its accounting follows international standards and peers’ practice. Any ECB scrutiny on that front would likely occur through regular model reviews rather than an ad-hoc probe.
The ECB has made governance a core theme in recent supervisory letters, pressing banks to maintain clear lines between control functions and executive decision-making. A direct intervention, however, would be unusual; most such findings surface quietly through the SREP process.
The Frankfurt civil court is expected to schedule procedural hearings in ahead 2026, with discovery focusing on the 2013 audit files and board minutes. Observers will also watch whether the London claimants viewk disclosure of the identical internal workpapers.
Whatever the outcome, the case forces Deutsche Bank — long intent on moving past its crisis-era baggage — to revisit a saga it thought was closed.
