It never rains but it pours.
Photograph by Thomas Lohnes — Getty Images
By Lucinda Shen
May 23, 2016

Troubled Wall Street giant Deutsche Bank (db) is under another investigation, this time by the Securities and Exchange Commission regarding the pricing and reporting of certain mortgage-backed securities.

The SEC wants to know whether the Frankfurt, Germany-based bank artificially raised the value of mortgage-backed securities in 2013 and later hid those losses for an extended period of time, Bloomberg first reported, citing people familiar with the matter.

The move would’ve pushed up Deutsche Bank’s earnings for at least a few quarters in 2013. And that year was hardly a standout for the bank: It reported a loss of $1.6 billion for the fourth quarter of 2013, while analysts had estimated profits of $600 million.

“We are cooperating with this investigation, which is looking into previously recognized losses on certain positions,” Deutsche Bank said in a statement to Fortune.

 

Investigators are looking into positions overseen by Troy Dixon, who managed trading of U.S. government-backed home-loan securities at Deutsche Bank, Bloomberg reported. Dixon left Deutsche Bank around Oct. 2013 to start his own hedge fund, Hollis Park.

Deutsche Bank also became the single largest trader of mortgage bonds with the Fed during the U.S.’s first round of quantitative easing in 2009 and 2010—while Dixon was overseeing the department.

2013 was a particularly difficult for the bank’s mortgage bond trading division. That was when the Federal Reserve hinted at an end to quantitative easing and slower bond buying, which damped the fixed-income market.

Deutsche Bank has also been trying to turn over a new leaf amid several regulatory probes and woes in the past few years. More recently, the bank found that six current and former employees had made about $37 million in personal profits.

Deutsche Bank has paid and set aside more than $14.1 billion for lawsuits and fines since 2012, Bloomberg reported.

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