German prosecutors investigate Morgan Stanley banker

Wed Jul 11, 2012 9:41am EDT
 
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By Christoph Steitz

FRANKFURT (Reuters) - German prosecutors have opened preliminary proceedings into alleged links between Morgan Stanley's (MS.N: Quote) top dealmaker in Germany and the former premier of the regional state of Baden-Wuerttemberg, relating to the state's purchase of shares in German utility EnBW (EBKG.DE: Quote) in 2010.

The Stuttgart public prosecutor's office said "sufficient and actual clues have emerged" suggesting ex-premier Stefan Mappus could have made himself liable to prosecution for breach of trust, while Morgan Stanley's Dirk Notheis could have made himself liable to prosecution for aiding and abetting breach of trust.

In a statement on Wednesday the prosecutor's office said several premises had been searched as part of the proceedings and a number of documents were seized.

A Morgan Stanley spokeswoman said in an emailed statement: "We confirm the presence of the Stuttgart public prosecutor's office in our business premises today. Morgan Stanley is cooperating with the public prosecutor's office during its investigation."

Notheis, 44, who ran Morgan Stanley's operations in Germany and Austria for more than three years, was granted leave of absence by the bank last month following an uproar over emails he reportedly exchanged with Mappus.

German newspapers in June published copies of emails Notheis reportedly sent to Mappus in 2010, when the southwestern state was trying to purchase a 45-percent stake in local utility EnBW from French energy group EDF (EDF.PA: Quote).

POLITICAL DEBATE

In the emails published by the newspapers, Notheis appears to give Mappus advice on how to limit time for political debate on a renationalization of EnBW, Germany's third-largest utility.   Continued...