LBBW bank raided for suspected fraud

Investigators in the southwestern city of Stuttgart on Monday raided the headquarters of regional bank LBBW to probe alleged fraud by several of its directors, the prosecutor's office said.

LBBW bank raided for suspected fraud
Photo: DPA

A total of 240 investigators and representatives from the office were tasked with retrieving documents that would back up suspicions against seven former and current members of the bank’s management board.

The investigation included several private homes, and has already recovered a considerable amount of documents, the prosecutor’s office said.

It focused on several hundred million euros in 2006 investments in the US subprime market for high-risk mortgages.

A prosecutor’s spokeswoman said bank directors were suspected of continuing to invest in risky financial instruments even after it became clear the market was about to collapse.

In mid 2007, that triggered a global financial crisis which subsequently worsened following the collapse of the US investment bank Lehman Brothers in September 2008.

Along with many other regional German banks, LBBW had invested heavily in risky assets and complex financial instruments which lost much of their value during the financial crisis. With the global economic slowdown, LBBW has also had to sharply increase its provisions against loan defaults by clients, while booking heavy restructuring costs.

In exchange for a state bailout, the bank has had to drastically curb its operations and now concentrates on financing small- and medium-sized German enterprises.

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Germany in talks on further payout for 1972 Olympics victims

The German government says it is in talks over further compensation for victims of the attack on the Munich Olympics, as the 50th anniversary of the atrocity approaches.

Germany in talks on further payout for 1972 Olympics victims

Ahead of the commemoration in September, relatives of the Israelis killed have indicated they are unhappy with what Germany is offering.

“Conversations based on trust are taking place with representatives of the victims’ families,” a German interior ministry spokesman told AFP when asked about the negotiations.

He did not specify who would benefit or how much money had been earmarked, saying only that any package would “again” be financed by the federal government, the state of Bavaria and the city of Munich.

On September 5th, 1972, eight gunmen broke into the Israeli team’s flat at the Olympic village, shooting dead two and taking nine Israelis hostage, threatening to kill them unless 232 Palestinian prisoners were released.

West German police responded with a bungled rescue operation in which all nine hostages were killed, along with five of the eight hostage-takers and a police officer.

An armed police officer in a tracksuit secures the block where terrorists  held Israeli hostages at the Olympic Village in Munich on 5th September 1972.

An armed police officer in a tracksuit secures the block where terrorists held Israeli hostages at the Olympic Village in Munich on 5th September 1972. Photo: picture alliance / dpa | Horst Ossingert

The spokeswoman for the victims’ families, Ankie Spitzer, told the German media group RND that the amount currently on the table was “insulting” and threatened a boycott of this year’s commemorations.

She said Berlin was offering a total of €10 million including around €4.5 million already provided in compensation between 1972 and 2002 — an amount she said did not correspond to international standards. 

“We are angry and disappointed,” said Spitzer, the widow of fencing coach Andre Spitzer who was killed in the attack. “We never wanted to talk publicly about money but now we are forced to.”

RND reported that the German and Israeli governments would like to see an accord by August 15th.

The interior ministry spokesman said that beyond compensation, Germany intended to use the anniversary for fresh “historical appraisal, remembrance and recognition”.

He said this would include the formation of a commission of German and Israeli historians to “comprehensively” establish what happened “from the perspective of the year 2022”.

This would lead to “an offer of further acts of acknowledgement of the relatives of the victims of the attack” and the “grave consequences” they suffered.