Some Deutsche Bank AG managers may have discussed the reputational risk of issuing withholding tax certificates at the center of a "cum-ex" share trading scheme, Reuters reported Jan. 4, citing an audit by Freshfields.

The German bank is embroiled in a probe into the cum-ex trades, a dividend-stripping technique used to avoid paying taxes.

A series of internal audits commissioned by Deutsche Bank and carried out by Freshfields looks at the bank's loans to companies that carried out this type of trade.

The documents, seen by Reuters, suggest that Deutsche traders discussed the associated reputational risk and concluded that it was acceptable, although they add that the evidence is "not clear-cut."

One of the audits points to failings by two traders, Simon Pearson and Joe Penna, and to other management shortcomings.

It was reported in December 2018 that Deutsche had agreed to pay €4 million to settle an investigation by Frankfurt prosecutors into its involvement in the so-called cum-ex trades.