FRANKFURT - BfG Bank AG denied a U.S. press report that it and a subsidiary, BfG Bank Luxembourg, were involved in securities transactions based on inside information.
Business Week reported that the Frankfurt-based bank and its Luxembourg unit had played a central role in an insider trading ring using money from European investors to buy stock in U.S. takeover targets.
"There are no reasons for investigations by German, Luxembourg, or U.S. supervisory authorities into both banks for alleged breaches of insider rules," said BfG, which is formally Bank fuer Gemeinwirtschaft. It had $41 billion in assets and was ranked 14th in Germany at Dec. 31.
The report came as BfG is the subject of takeover talks between its majority owner, Aachener und Muenchener Beteiligungs, and the French bank Credit Lyonnais. A BfG spokesman said the allegations were unlikely to affect the talks.
At the Frankfurt public prosecutors' office, spokesman Hubert Harth said he was unaware of any investigation into BfG or its employees. He noted that insider trading is not a criminal offense in Germany. Deals involving inside knowledge are illegal only if they result in tax evasion.
In Luxembourg, insider trading was not illegal until late 1991.
Business Week said Lothar Poschmann, at the time an investment adviser at BfG Luxembourg, had channeled clients' funds to a Wall Street securities trading firm, which used the money to buy shares in firms that were about to be taken over.
Investment Aide Fired
News of the planned takeovers allegedly had been leaked to the firm ahead of official publication, the magazine said.
The BfG spokesman said Mr. Poschmann was dismissed early in 1991 after an internal probe unearthed irregularities in his use of clients' deposits. BfG was suing Mr. Poschmann, who is under investigation by Luxembourg supervisory authorities, he added.
The Business Week report said research had shown that the insider deals had been known widely within the bank. The U.S. securities firm involved no longer exists.
The BfG spokesman said the bank had recently checked all employee accounts for irregularities and found none.