Deutsche Bank Dismisses Credit Trader Over Client Chats

(Bloomberg) -- Deutsche Bank AG dismissed a trader after finding that he disclosed details about Credit Suisse Group AG’s involvement in a trade, according to people with knowledge of the matter.

Tian Zeng, a senior credit-index trader in New York, left the German bank at the end of February following an internal review, brokerage-industry records show. Deutsche Bank concluded that he violated the firm’s policies “with respect to confidentiality and external third-party communications,” according to the records.

The bank reviewed Zeng’s communications upon receiving a complaint about his conduct, according to the filing. A spokesman for Deutsche Bank declined to comment. Zeng didn’t respond to requests for comment.

The largest banks are on alert for any communications that could be dishonest, or as in this case, appear to breach confidentiality. Increasingly, banks are showing zero tolerance for appearance of impropriety as they seek to avoid any censure for lax controls.

In this case, Zeng was made aware of a credit-swaps index trade carried out by the desk at Credit Suisse, two people said. He shared that information with a client, they said. Credit Suisse lodged a complaint about the incident, one of the people said. A representative for the Swiss firm declined to comment.

A Deutsche Bank employee also raised concern about the sharing of the Credit Suisse information, according to the people with knowledge of the matter. Internal managers determined that he disclosed the identity of a counterparty on a trade to another firm, in violation of company policy, said the people, who asked not to be identified because the information isn’t public.

Zeng’s discussion was part of a series of chats with individuals inside and outside the bank, indicating he may have slipped rather than intentionally relaying confidential trading positions, two of the people said. Some traders are worried that Zeng has been faulted for an error that can easily occur, while others said the practice is a gray area of sharing market knowledge, the people said.

Zeng joined the German lender in 2017 as a senior credit-index trader, according to a statement from the bank at the time. He was part of a wave of additions to beef up the credit-trading unit that included the hiring of Zeng’s supervisor, former Goldman Sachs Group Inc. partner Paul Huchro.

Zeng was one of top-performing revenue generators on Huchro’s team, which also included investment-grade and high-yield bond traders, people said.

Before that, Zeng was at Citadel Securities, where he helped Ken Griffin’s firm make a foray into making markets in credit derivatives. Zeng started out his Wall Street career at Citigroup Inc. in 2010.

Zeng’s departure came days before Deutsche Bank employees learned their bonuses for 2018.

--With assistance from Saijel Kishan and Alastair Marsh.

To contact the reporter on this story: Sridhar Natarajan in New York at snatarajan15@bloomberg.net

To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Dan Reichl

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