Top Mizuho Credit Trader Jorgensen Leaves Amid Adler Scrutiny

(Bloomberg) -- Mizuho Financial Group Inc.'s top credit trader in Europe has departed the Japanese lender, months after his ties to embattled German real-estate firm Adler Group SA came under scrutiny.

Claus Jorgensen, hired by Mizuho in 2019 as head of credit trading for Europe, the Middle East and Africa, left in recent weeks, according to people familiar with the matter.

Bloomberg reported his close links to Adler in October, including how his team pitched the bonds of a company that was merging with Adler Real Estate without disclosing that Jorgensen was a director of the latter firm.

Jorgensen, who has denied any wrongdoing, declined to comment. A spokeswoman for Mizuho in London also didn't comment. The bank has previously said that it has “an established conflict of interest management policy which was adhered to” and that trading “restrictions were in place at all relevant times.”

The relationship between Jorgensen and Adler has dragged Mizuho into the scandal swirling around one of Germany's biggest property companies. Short-seller Fraser Perring's Viceroy Research has accused Adler of “systemic dishonesty” and alleged that it's run for the benefit of a small cadre of shareholders including Austrian entrepreneur Cevdet Caner. Its shares and bonds have plunged since last year.

Adler and Caner have denied any wrongdoing. Caner has filed a criminal complaint against Perring. A forensic review by KPMG has so far been unable to refute some of the short-sellers' key claims and has been extended, with the results set to be made public on April 22, the company said last month.

Mizuho pitched bonds linked to Adler multiple times during Jorgensen's tenure at the Tokyo-based bank, Bloomberg reported in October. This was in spite of his director role at Adler Real Estate, now an Adler subsidiary after a complex three-way merger in 2020. Mizuho has previously said that it removed trading restrictions before the merger was complete, which meant there “was no need for any such disclosure to be made” and that Jorgensen listed his board role on his LinkedIn page.

Jorgensen is currently a member of Adler's board of directors. He stepped down from the supervisory board of the Adler Real Estate subsidiary last month, spokesman Matteo Twerenbold said in an email.

Traders at banks are subject to restrictions to avoid conflicts of interest and rarely sit on boards as a result.

Jorgensen is a veteran trader of high-risk, high-yield corporate debt. He's known around the City of London for his imposing, 6-and-a-half-foot stature and for entertaining clients at 67 Pall Mall, an oak-paneled drinking club close to Buckingham Palace.

He joined Mizuho after a stint at hedge fund Fairwater Capital LLP, which became one of the biggest shareholders in Adler before selling much of its stake in October. He previously worked at HSBC Holdings Plc but was fired in 2015 for undisclosed reasons. He lodged an unfair dismissal claim against the bank, which was settled privately.