The investigation relates to the timing of the transaction, one day after the bank reiterated its buy recommendation on the stock, which the authority thinks may have constituted a breach of German stock exchange law.
Deutsche Telekom and institutional investors in the group were incensed after the stock lost nearly 15% in the three days following the trade. Deutsche Telekom is considering cutting the bank from future business as a result.
The supervisory authority, which is part of the economics ministry of the land of Hessen, is entitled to investigate suspected breaches of the German stock exchange law but sanctions, in criminal cases, can only be taken by law courts.
Of the shares traded this week, 35 million originated from Hutchison Whampoa. An unnamed buyer bought them from the Hong Kong-based conglomerate controlled by Li Ka-Shing before May 31, the last day on which a lock-up agreement allowed Hutchison to sell some of its DT holding.
Deutsche Bank sold the DT shares on behalf of an unnamed client. DT’s share price fell 4.6% to EUR20.28, a three-year low.
Hutchison had been a core VoiceStream shareholder, and received more than 200 million DT shares when the German telecommunications company bought VoiceStream this year.
Agreements were set up to prevent a flood of DT shares being released on the market at the same time by VoiceStream investors. Institutional investors had expected the bulk of DT shares to hit the market after September 1.
Deutsche Bank has as yet remained silent about the whole episode.
