Deutsche Bank’s Board Can't Seem To Grasp Corporate Governance

is a Bloomberg opinion columnist. Let's talk about what happened officials rated Deutsche Bank offices. What were they looking for? Why now? And how much lower can these shairs go? Um? Well, I mean they can always go a lot lower, as we've seen over the past a few years in terms of what they were looking forward. Why now? I mean, look,

there's a lot we don't know. But the fact is this, this seems to be linked to the Panama Papers scandal, the leaks a couple of years ago, a huge whate of documents detailing offshore accounts and assets you know, squirreled away, uh, and it seems to have caught up with Deutsche Bank and a couple of unnamed employees who seems to be part of the part of the probe. So I guess one more, one more thing to worry about on a long list of things to worry about, Leonel, the shares

of Deutsche Bank. They are lower by more than five percent. They've lost more than fifty percent of their value this year, and just earlier today, as Lisa was referencing, six different Deutsche Bank properties were searched by police. Police vehicles lined up outside of Deutsche Bank's central Frankfort headquarters and according to a person who's familiar with the matter, one of the two people being probe by Frankfort prosecutors and the

money laundering investigations works in the bank's anti financial crime section. Yeah, and look, bigger picture is right, money laundering, as we've seen at the Danska bank scandal. This, you know, money laundering is not something that's restricted to one bank or unique to one bank, and sadly, even banks that say they have the right controls often failed at the hurdle. I just think the bigger picture goes beyond the sort

of the shot can or of this investigation. You know, Deutsche Bank is a bank that has had a lot of problems to do with its compliance and its controls even before this. It's the reason why it failed the US stress test. It's it's the reason why I had a bunch of fines. It's part of the reason why it's lost money for three years in a row. I think even if you, even if you didn't know about today's probe, you would really have reason to worry about

the simple operational control at this institution. It's a it's a serious concern. Who is to blame for the institutional laps that seemed to be coming up again and again here at George Bank. So I think that's not wishing to point the finger anyone in particular, but you really have to question the board's the board's behavior, that the board's way of acting over the past couple of years.

We had the previous CEO, John cry and do it do a pretty good job of at least trying to get the bank to survive in the face of fines and just trying to adapt to the post crisis world. And he did, he did, He did actually succeed in raising capital at the bank, and he was pushed out in a very messy, very hasty way, earlier this year and the new CEO seems to not be getting a handle on things at all, and there's now talk of

a whole new round of executives being pushed out. And I think at some point, if if this keeps getting worse, people are going to have to look at the board and think what's happening? Why is the chairman still here? Why is the board the way it is? This clearly has got to stop. But the accountability goes way beyond the CEO and the current management. You know, does this create operation of paralysis at an institution such as Deutsche Bank? I think it's worse than paralysis. It's it just seems

like it's completely disorderly. If you think about it, wouldn't it be worth a bit of paralysis just to control things? If if this is a control failure, wouldn't it be worth spending all You've got to at least throw a line under all this? Think of all of the trading mishaps that every year there's a risk management blow up.

They try and protect against risk but also make money and it doesn't work, you know though, I mean to be fair, right, all banks are involved in different mixes of businesses and some are more risk prone than others, right, I mean, just let's get that out there. I mean, if you're dealing with for private wealth, for example, you have to be really careful not to be dealing with tax evasion or money laundering or other things like that.

Correspondence banking similar risk issues here. So is joy to Bank unique in some of its transgressions or is this just the mix of businesses that it's got itself in higher risk and perhaps they didn't amp up the risk management as much as they should have. Let me put it this way, we we there is no secret to dorture banks issues. It has a gigantic balance sheet, it

is primarily exposed to investment banking. But given that we have been in this downward spiral since do you not think that this goes beyond some kind of sectoral issue. Isn't it time that there was a question made about who is controlling this bank and what the operational control is. I genuinely don't see how the current situation where you have the old CEO pushed out in favor of a new CEO in a completely messy way, but the bard remains unchanged, and the current situation where you find the

rate is one thing, but forget even the rate. The reports coming out that the CEO is considering replacing the head of regulation, the head of US banking, and the head of the investment bank potentially all in one go. And I just think that tells you that there is a complete lack of under standing of how to get control, how to get a grip on this. And I think this goes way beyond saying well, this is the business

of banking. That's that's that's my view. Thanks very much for being with us, Leonel laurent Is Bloomberg Opinion columnists. He joins us from London speaking about Deutsche Bank and the raid that was initiated today on their Frankfort headquarters. Shares of Deutsche Bank are lower by five percent, and as we mentioned, they are lower by more than fifty percent so far this year. I want to bring in our own legal expert here at June Grosso or legal analyst and co host of Bloomberg Law, to tell us

more about this rather extraordinary turn of events. Tell us a little bit about what the plea deal with Michael Cohen would involve, and why does pleading guilty to lying to the Senate Intelligence Committee in why is that a big deal? It's a big deal because of the significance of this to the Mueller investigation. When Michael Cohen pleaded earlier this year to federal charges, that was not that was at the Southern District of New York. It was

not related to the Mueller investigation. In fact, Mueller had handed off Michael Cohen so to speak to the Southern District. So everyone assumed that, oh, he has nothing to contribute to the Mueller investigation. Then you remember that his attorney, Lannie Davis, went on TV several times and talked to different outlets and said he has a lot to give here. It was almost as a plea to the Special Council. Talked to Michael Cohen because we want to we want

to deal Michael Cohen's other plea. There was no deal involved, which was sort of shocking to most lawyers. Why make a plea when you don't have a deal. This is now a cooperation agreement with the Special Counsel. He's pleading to new charges and it's about the statements that he made. And you heard President Trump referred to us refer to that statement that Michael Cohen well, Michael Cohn is now saying that was a lie. We didn't end negotiations for

the Russia tower in Moscow in January. They continued until June, when he was the presumptive GOP nominee. Yeah. Well, let's let's find out more about that Russia deal that President Trump said everybody knew about. Let's bring in Larry Liebert, who is in Washington, d C. For Bloomberg News. Larry, thank you so much for being with us. Can you give us a sense of what this Moscow property deal was and how it's relevant to this whole ongoing discussion

of conspiracy or collusion. I think, first of all, there's been a lot of talk that the Muller pro will peter out in regard to the President. You know, he doesn't really have anything direct on the President. He's about to close shop, not at all to suggests. Uh. And and the plea here uh indicates uh that there was an effort to cover up or at least minimize this talk of a Trump tower in Moscow as an issue that was indeed settled in January, when in fact it was June. And uh, you know, in his uh now

erroneous Uh deceptive testimony to Congress. Uh. Cone had made a big point that we stopped talking about this way before the Iowa caucuses or any of the primaries. Uh, Today's saying no, the talks continued now. The President shrugged it off. He said, UH that first of all, that Cone is a liar, but secondly that Uh, there was nothing wrong about pursuing a deal. Uh. But mother may have different ideas on that. In terms of the reasons, he had said, is the motives to collude with Russia

June Crosso. The President also during this impromptu news conference, said that one of the reasons why the conversations continued about the tower of the real estate project in Russia is he did not know, obviously the outcome of the U. S election, and that by foregoing the possibility of a business deal, he would be hurting his business. It's not about the deal. It's about what was said about the deal and what the intent was and what went on about the deal. So it's not the deal itself. That's

sort of a diversion. You know, he could make a deal. It's a business. But in Michael the information for Cohen's plea, what he says, and this really goes to the heart of what you're asking. He said that he made false statements to minimize the links between the Moscow project and individual one that's President Trump, to give the false impression that the Moscow project ended before the Iowa Caucus. That's the first primary. And to limit in the hopes of

limiting the ongoing Russia investigation. That's the key here, the hopes of limiting. And also for all the people who ask about you know, people say are speculating about what is President Trump's connection to Soviet President Vladimir Putin? Russian

President Ladimir Putin. In this information, Cohen agreed to travel to Russia, and they mentioned that the conversations that were had between the press secretary for President Putin, he received response from the office of Russian official won the press secretary for the President of Russia. So and then there was an email where he said, it's about the President of Russia. They called today, So behind this is all

the connections to Vladimir Putin. All right, Larry, can we take a step back and just talk about what you kind of initially said, which is any signs that Robert Mueller was winding down his investigation are probably misplaced, and this sort of shows that they're very deep in it. So what have we learned about the stage of the

investigation when we'll get a final report? And you know, how much does this change the calculus about whether this ultimately does go back to President Trump and in some way imperil his presidency, because right, I mean, that's that's at the end of the day, what everybody is wondering, Well, we haven't heard any firm guidance that from sources that suggest that there's been a change in our early reporting that Mueller was closing in on some some of his

major conclusions. Uh. But uh, you know, even if he issues conclusions, he's set uh in the course for prosecutions, for inquiries, uh, not only by his office, but but by other U S attorneys that may go on for a good while and and trials as well. So uh, this thing isn't ending in any case. Um. And the the ultimate question, uh, in part is how strongly he condemns the president knows around him, Uh, even if he finds this has been the general view that you can't

indict a sitting president. So the plot is thinking now that we're past the elections and we will see a lot more happening, but exactly the pace and exactly how close to the president gets uh, you know, we don't yet know. But this is a clue. But it's not all over yet. June Grosso, you want to talk about timing, I do, because the timing of this is important and

you might say peculiar. Remember that President Trump submitted answers under oath to the Special Counsel's office, and now he's locked into those answers, and now all of a sudden we have the Cohen Plate, which contradicts perhaps and we would say probably contradicts those answers. So the timing is really unusual. Also, the Manafort deal falling apart on Monday because of information the Special Counsel has. The timing is really important and the thing that President Trump is locked

into those answers really interesting. And we will continue to tap both of you for more insight as this develops. June Grosso, legal analyst and co host of Bloomberg Law. Larry Leebert, national security editor for Bloomer, coming to us also from Washington, d C. Thank you very much for being with us. Our guest is the honorable Vic Fideli. He is the Finance Minister of Ontario. Ontario one of thirteen provinces and territories of Canada, and it is home

to the largest manufacturing segment of the Canadian economy. More than fifty of manufacturing happens in Ontario. Minister, thank you very much for being here. Tell us currently, what are the finances and the economic health of Ontario? While I can say that Ontario, while we had a previous government in power for fifteen years, our conservative government has now

been in for five months. And uh, the first thing that we did was begin with efficiencies, and we found three point two billion dollars worth of efficiencies in the last eleven weeks and returned two point seven billion dollars back to individuals, families and businesses. So Ontario is back

and we're open for business. I'm just wondering a lot of people from the US when they think about Ontario right now here, about what we've heard about the Toronto housing market, how much is this on your radar and play into your day to day just the incredible surgeon pricing. Well, we ended up with what we'll call a soft landing. Two things happened over the last year. We put a foreign investment tax that the previous government put in and

that helped to slow down the market. And the federal government changed the mortgage availability rules in January, so that also so affected the market. So between the two of them, it brought us in for a softer landing, so we didn't see any kind of abubble at all. Uh And now in our fall economic statement, we just announced that we will remove rent control for new developments, so it's

opened up. The business community is now ready to invest because they can build and know that they've got a growing, a growing return. A rent control will stay for those existing owners are renters. Now, as I mentioned, Ontario is Canada's leading manufacturing province, accounting for more than fifty of total manufacturing shipments. That means a relationship with the state

of Michigan. Can you tell us what trade confrontations and conciliations between the United States and Canada have meant for the province of Ontario. Well, I can tell you that our Premier, Doug Ford has been talking to all of the governors from the nineteen states where we are number one trading partner, and I think it's six states where we're the number two trading partner or nine other states where the number two trading partner. Uh. And you'll find

a premier Ford. He's a business person and he's he's not an idealogue. It's not about being on the right or the left to him, It's all about pragmatism. If it's the right thing to do, let's do it now. Manufacturing, although we do account for, is really a twelve percent of our economy, and Ontario fintech and financial services are nine. Agriculture, while it's a smaller percentage, is still a huge employer, one of the largest employers in the province as well.

So we have a truly a diversified economy right across the province of Ontario. We we do about three billion dollars worth of movies are filmed in Toronto and further north. I live about four hours north of Toronto, where there's two feet of snow today. Uh. And we do a lot of Hallmark Christmas movies that are filmed, a tremendous amount of film activity as well. I'm just wondering also

about cannabis legalization in in Canada. I'm just wondering whether you've accounted for much higher revenues in taxes or anything else from the legalization of cannabis. You know, that's an excellent question. Uh. And what we decided to do uh that so that this is non at tax revenue play for the Province of Ontario. It's unlike the other we call them at home syntax is alcohol and tobacco that generally see an increase at budget in the budgets. This is not going to happen. This is all about Uh.

This was federally regulated, so it's a law that was brought in by the federal government right across Canada. We opted to make our price point low so that we can First of all, it's all about the safety of our children, the safety on our roads, and crushing the illegal market. So that's really where we are. So it's not about a financial play. We're not going to make money at this in the first year of the second

year at all. We're returning forty million dollars to the municipalities to help them with with the rollout of cannabis. Just real quick twenty seconds here, I'm wondering how much Toronto and the interior region has benefited from the crackdown on immigration in the United States. Uh. Given the fact that that you've been much more open. It's quite interesting. We we were at about one point eight percent of growth, will probably hit about one point five percent this year.

So we've had a huge influx. More than two hundred thousand people have come into the Province of Ontario and uh, this we're we're encouraging this to happen. We we look forward to it and they're absolutely Uh the employees of the future. Thank you so much for being with us. That is Ontario Finance Minister, the honorable Vic Fidelli, talking about all things Canada as well as Ontario. Him. When I was fourteen, I did some things. I was into art and dance. I was not building robotic arms in

my bedroom. But our next guest that this, our nice guest went beyond Lego sets Eastern Lasha Pale joins is now he's founder of Unlimited Tomorrow, which is based in Colorado, but he joins us here in our eleven three oh studios. So you're twenty three and you made your first prosthetic arm when you were fourteen. What inspired you to do that? Yeah, So I grew up in a very small town in Colorado named Mankus. Uh. There was a population about people.

My graduating class in high school was twenty three kids, so you can imagine it's very limited resources. And that really made me excited, and I started learning outside my school, would run home, take things apart. I love curiosity and tinkering, and I came up with an idea to make a robotic hand and piece together legos. Fishing line plastic supports legos to piece it all together and turn this idea

into reality. UM. A couple of years after that, I started advancing these designs using three D printing, making four robotic arms, and I met a small girl out of science for that had an eighty dollar prosthetic limb that I was simpler than what I was creating for a couple hundred dollars out of my bedroom, and that was my AHA moment. Tell us about how you met Tony Robbins, who was a founding partner of your company, and how did you demonstrate the ability to custom make prosthetics based

on three D scan technology. Well, it was it was a busy year. When I was seventeen years old. I was I was doing an internship at NASA. I started creating these these arms and started getting national media attention. I was traveling around the world doing talks and speeches and I was invited to give a TED talk in Denver and that was a really big milestone for me. That's actually how Tony Robbins he he saw this TED talk.

He gave me a call one day pretty much and said, I hope people around the world psychologically and I would love to help them physically. Let's partner together to make this a reality. And this is when I was just about to graduate from high school. I was seventeen years old. Right when I turned eighteen, we partnered together to form Unlimited Tomorrow and since then we've been refining the technology.

This was almost four years ago now and UH and we just recently about two years ago, we partnered with Microsoft and they helped create the first procect device for a small tenual grow named Momo, and that really set the bar for us. So we sent scanners down to her in Florida. We scanned her arm that she's missing and her other arm, her full arm, and we used that data to make him your image. We included fingernails,

custom skin to own. UH incorporated a lot of technology into this and it really highlights the enabling technology, which is three D printing for this technology, is it. I just want to know a little bit more about Unlimited Tomorrow, which can create these advanced prosthetics that even match the skin tone for about of the cost of the available prosthetics that are comfortable out there. Are you designing the prosthetics, do you work with designers? What sort of uh, the

sort of function here that Unlimited Tomorrow place. Yeah, that's a great question. When I first started looking into this industry, there's I saw there's a lot of problems there. It's kind of a scattered uh kind of market where prosthetic manufactures up charges Celtic clinicians, they then sell to the amputee. It's an insurance game and into the end user. It's a really inefficient, expensive process that can take months on end. And so we really designed this from the ground up.

We design every aspect from the software to custom electronics, all the mechanics. You do all that in house. And we've also introduced a new business model which is going

directly to the consumer. And so we cut out all these middlemen that caused a lot of inefficiencies and cost and we find that we can produce a better result, that has increased functionality, It weighs less, it looks better um within a matter of days versus months, and for about five to ten thousand dollars versus about eighty thousand dollars. And so we've really hit the bar on on a lot of these problems. How are you raising money in

order to keep the company afloat and expand manufacturing. So early on I made a I made a conscious decision to really turn to the people, you know, a limited tomorrow. We we affect people's lives around the world, and we were people business powered by people. Uh So we turned a crowdfunding and crowdfunding is a perfect application for for what we're doing. It's involving cutting edge technology, very humanitarian, philanthropic you know, mission behind this, and we're doing it

in new ways. Early this year, we went through equity crowdfunding, which allows for accredited and unaccredited investors to invest in the company. We ended up raising one point six million dollars in about thirty days with investors, which actually broke reck and and and equity crowd funding world. Uh So, this is this is one step of of what we're

doing today. About a couple weeks ago, we launched a new indieogal campaign which is more of a standard crowd funding campaign that you see on Kickstarter indigo Go, and the goal is to raise money to be able to donate the first one hundred devices to one hundred amazing amputees around the world, a lot of children and adults. Where we called the campaign one hundred Tomorrows. And as of right now, we have about sixty seven devices of the one hundred devices already raised, so about four hundred

forty dollars. Uh, So we're we're we're working to meet the five thousand dollar goal and really start to start scaling from here. I find out really compelling when you start talking about the inefficiencies built into the whole prosthetics world. And I'm wondering whether during your explorations and the evolution of this business, you've seen other avenues or other aspects of the healthcare industry that you think some of the

three D printing and the technology will could be applied to. Absolutely. I mean there's countless examples. Um a lot of them are physical medical device aces and really comes back to the philosophy of Unlimited Tomorrow. It's really augmenting the human body. We want to use technology to unlock someone's full potential. So this could be giving a child a procetic limb that they go to school very confident they can get past all these you know, physical limitations of just everyday life.

I could also mean that you know someone who's paralyzed, and what are your options. It's either a wheel chair or a couple other devices out there for rehabilitation. When you look at this technology and and some of the technology that we've patented and developed, and we can easily accommodate for exoskeletons and other system devices. So essentially a robotic para legs. And it's a very similar process and industry with the with procetics that it's a very expensive,

you know, hundred thousand dollar device. It's out of reach for you know, the people who really need to use it um but it's not it's not extreme. It doesn't need cost a hundred thousand dollars. We can produce it for far less, and by using three D printing a new manufacturing techniques, we can very can be very slim and you know, be a startup and compete with this large medical world. Well that competition obviously takes a lot of courage, and you've shown that by building this company

from scratch. What are the challenges that you face to get people aware that this is an up an option for them rather than to go in a more traditional prosthetic direction. Well, we actually haven't had any any type

of problem. We actually get emails probably hundreds of emails a day from people around the world, um from yeah, amazing, direct directly from people right right, and and it's it's a known problem, especially if you are on the other side of it, right you know, we you know, if we're sitting here, we've all seen people that are missing limbs.

But you don't really know the process of what it takes to you know, if you were, you know, to get run over and and had an injury or or has it have a disease and you have you had your arm amputated, you wouldn't really a person want to know the whole process. So that's part of my job is also educated. You know, there's over thirty million amputees worldwide. Only five percent of the have acts to proceect devices

and that's big problem. Uh, and not a lot of people realize that, and so part of this is educating, you know. Part of this is is creating a model that they can actually reach out and and uh, you know, get a device through us very easily, which is what we're solving with this new business model and technology. We actually, if you were to approaches today, we send you a three D scanner, so you can actually scan yourself in

the comfort of your own home. We get that data remotely, we can process that, we three D print it, and uh and you're off to the races. It's a it's a really amazing process. Thanks very much for sharing this story with us. Eastern La Chapelle. He is the founder of Unlimited Tomorrow. They are based in Colorado. Thanks for listening to the Bloomberg P and L podcast. You can subscribe and listen to interviews at Apple podcast, SoundCloud, or whatever podcast platform you prefer. I'm Pim Fox. I'm on

Twitter at pim Fox. I'm on Twitter at Lisa Abramo. It's one before the podcast. You can always catch us worldwide on Bloomberg Radio.