every weekday between the fall of 2011 and early 2015, a Russian broker named Igor Volkov called the equities desk of Deutsche Bank’s Moscow headquarters.Volkov would speak to a sales trader—often, a young woman named Dina Maksutova—and ask her to place two trades simultaneously.In the second trade, Volkov—acting on behalf of a different company, which typically was registered in an offshore territory, such as the British Virgin Islands—would sell the same Russian stock, in the same quantity, in London, in exchange for dollars, pounds, or euros.Both the Russian company and the offshore company had the same owner.Deutsche Bank was helping the client to buy and sell to himself.
According to a former employee, before the crash of 2008 the desk’s yearly profit was nearly three hundred million dollars.
The purpose of an equities desk at an investment bank is to help approved clients buy and sell stock, and there could be legitimate reasons for making a simultaneous trade.
A client might want to benefit, say, from the difference between the local and the foreign price of a stock.
Deutsche Bank earned a small commission for executing the buy and sell orders, but in financial terms the clients finished roughly where they began.
To inspect the trades individually, however, was like standing too close to an Impressionist painting—you saw the brushstrokes and missed the lilies.