Back in 2009, Deutsche Bank salesman J. P. Rorech was the CDS salesman who, alongside Millennium PM Renato Negrin, were the first two traders accused by the SEC of insider trading using Credit Default Swaps, a product which many then said the SEC has no jurisdiction over as it is a “security-based swap” transaction (an umbrella loophole which was subsequently revised). The insider trading charge was subsequently dropped after the SEC was unable to provide sufficient proof the two had colluded “off the record” in purchasing VNU CDS on material non-public info, but the stigma may have stuck.
And while it is not clear if that particular incident is what the bank with the world’s greatest amount of outstanding notional derivatives was concerned about, or whether the ongoing collapse in bond market liquidity was the factor but moments ago, Bloomberg released a stunning update that Europe’s largest bank is exiting the single-name, both IG and HY, CDS product line, which for years was one of its biggest revenue generators and a product in which DB was for a long time one of the best and deepest CDS trade axes.
This post was published at Zero Hedge on 11/17/2014.
Follow on Twitter
Recent Comments