Mastermind or scapegoat? Scathing Bloomberg profile of former head of Deutsche’s Russia equities desk: Before German lender Deutsche Bank’s shares tumbled last month following news the US Department of Justice’s asked the bank to pay USD 14 bn to resolve a probe into the bank’s mortgage securities from 2005-2007 — far exceeding the money Deutsche has set aside for litigation, but which the bank said was simply an “opening position” by the DoJ to start negotiations — the bank was already dealing with another crisis also currently under investigation by the US authority: a USD 10 bn scandal to funnel money out of Russia and into London mostly via mirror trading.

Yesterday’s Bloomberg profile on the man at the center of alleged wrongdoing, the former head of Deutsche’s Russia equities desk Tim Wiswell, serves as a sequel of sorts to the New Yorker’s take that we ran as our Worth Reading back in August. “Mirror trades are not inherently illegal,” the New Yorker’s Ed Caesar wrote at the time. “Viewed with detachment, however, repeated mirror trades suggest a sustained plot to shift and hide money of possibly dubious origin.”

A full month before news of the mirror trading scandal broke, Deutsche released a note titled Dark Matter (pdf) which opens with: “Errors and omissions in the balance of payments should be random, but are not… In the UK, large positive net errors and omissions likely represent unrecorded financial inflows… For the first time, we confirm through balance of payments data the popular belief that Russian money has flooded into the UK in recent years… there is strong evidence that a good chunk of the UK’s GBP 133 bn of hidden capital inflows is related to Russia.”

As for Wiswell, this Bloomberg profile is pretty brutal: “At first Wiswell was, in the language of a Russian trading floor, a ‘desk b****.’ Former colleagues say he ran errands, fetched breakfast, and loaded Jay Z tracks onto his boss’s iPod.” (Read A Russian tragedy: How Deutsche Bank’s “Wiz” kid fell to Earth)