Earlier this month, Spiegel Online reported that an internal investigation by Germany’s Deutsche Bank found that bank executives hire investigators who spied on board members and a shareholder. Now, the Wall Street Journal reports that Deutsche Bank has fired two executives because of the spying.
Rafael Schenz, the company’s head of German corporate security, has been dismissed. Mr. Schenz had been suspended in May pending completion of the investigation into whether private-detective firms hired by the bank violated privacy laws.
Wolfram Schmitt, the bank’s head of investor relations, had also been suspended and now has been dismissed, apparently for his involvement in sharing shareholder information with the detectives, the person familiar with the matter said. The dismissals were first reported by German magazine Der Spiegel.
The Wall Street Journal notes that the “dismissals come as prosecutors in Frankfurt have opened a preliminary probe into whether Deutsche Bank or its senior officials may have violated a set of civil and criminal laws that protect individual privacy by spying on an activist shareholder. Germany’s financial regulators and the state’s Data Protection Authority are also examining the incidents.”
This case is reminiscent of the Hewlett-Packard’s phone-record spying scandal. In early 2006, then-HP Chair Patricia Dunn hired private investigators that used “pretexting” to acquire the personal phone records of board members and journalists in an effort to locate the source of leaks to the media. (“Pretexting” is a fancy word for “pretending to be someone else in order to get his or her phone records.”) There were various criminal and Congressional investigations. Dunn said she didn’t know that the investigators were pretexting, and the charges against her were eventually dismissed. The scandal prompted Congress to pass the Telephone and Records Privacy Act of 2006, which prohibits pretexting to gather phone record data (with exceptions for law enforcement).