Financial news

Head of Financial Crime Unit to Resign

After just six months in office, Peter Hazlewood will resign his post as chief of the Deutsche Bank unit tasked with fighting money laundering, Handelsblatt has confirmed.

Deutsche Bank has decided to shake up the leadership of its financial crime unit even as it seeks to settle a costly money-laundering scandal in Russia.

Peter Hazlewood will resign as head of the unit tasked with fighting money laundering, Handelsblatt has learned from sources in the financial industry.

Mr. Hazlewood, a British national, took over the reigns at Deutsche Bank’s anti-financial crime unit last July after his predecessor, Ulrich Göres, resigned.

The financial crime unit is one of the few divisions exempt from a hiring freeze at Deutsche Bank.

Deutsche Bank declined to comment. German weekly Manager Magazin first reported the story.

It’s still unclear why exactly Deutsche has decided on a leadership change at its financial crime unit. Mr. Hazlewood will remain at the bank in a different capacity.

Deutsche on Thursday named Philippe Vollot as Mr. Hazlewood’s successor. Mr. Vollot has worked at the bank for 13 years and has experience in regulatory compliance.

German’s largest financial institution has sought to strengthen Mr. Hazlewood’s unit over the past year in the wake of a money laundering scandal in Russia. Deutsche clients in Moscow allegedly laundered €10 billion through the bank’s offices in London. American, British, German and Russian authorities are all investigating the case.

The money laundering scandal is considered the most dangerous of more than a thousand outstanding legal risks facing Deutsche, now that a $7-billion settlement has been reached over its mortgage dealings in the run-up to the U.S. financial crisis.

U.S. authorities are also investigating whether or not the bank violated sanctions against Russia in connection with the laundering scheme. A fine could cost the financial institution billions.

Given Deutsche’s ongoing legal woes, the financial crime unit is one of the few divisions exempt from a hiring freeze at the bank, which has been beset by more than €10 billion in legal settlements and regulatory fines since 2010. The legal costs are part of the reason Deutsche is in the process of cutting about a tenth of its workforce and pulling out of unprofitable businesses around the world, all in a bid to return to sustainable profitability.

Mr. Hazlewood’s own team grew by a third to 770 people in 2016, and it will expand by another 50 percent this year, according to Handelsblatt’s sources.

Mr. Hazlewood is a respected expert who previously dealt with money laundering at major banks such as HSBC, JP Morgan, Standard Chartered and DBS. Before his career in the banking sector, he served as a detective senior inspector with the Hong Kong police.

Mr. Hazlewood, however, apparently had a difficult relationship with his boss Sylvie Matherat, who is responsible for regulatory compliance on Deutsche’s executive board. And some officials at the bank were not satisfied with his management skills.

Though Deutsche at least ostensibly plans to keep Mr. Hazlewood at the bank in a new capacity, that’s no guarantee he will remain indefinitely.