Deutsche Bank AG (NYSE:DB) (ETR:DBK) is now being investigated by Germany’s Bundesbank and financial authority Bafin, as a result of the global Libor scandal. Allegations have risen that the bank could not value the derivative portfolio correctly.

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According to sources, the Central Bank of Germany was looking into the matter in which the Deutsche Bank is accused of missing the correct valuation of the credit derivatives from 2007 to 2010. The Bank is alleged to have  hidden as much as $12 billion in losses.

“This is a routine investigation. There is no prejudgment,” a source familiar with the investigation said. According to the source, the regulators have assumed that there was nothing wrong with the Deutsche Bank account. He further said that the regulators can also go to New York as a part of the probe to meet people who accused the bank of this scandal.

Deutsche Bank AG (NYSE:DB) (ETR:DBK), however, denied the accusations and said that it was baseless and, further declined to comment. Bundesbank also declined to comment by saying that it would affect the individual institution. There was no comment released from Bafin, as well.

According to the Financial Times, three former Deutsche Employees accused the bank of being unable to track the source of $12 billion of unrealized loss during the financial crisis. The suit was filed with the U.S. securities regulators. At the time of allegations, it said that these accusations are two and a half year old and the probing body has found nothing against the bank.

Chief Officer Stefan Krause informed the analysts and investors that the bank hired a law firm Fried, Frank, Harris, Shriver & Jacobson LLP in March 2010 to look into the matter raised by a trader who accused the bank of covering up the paper losses during the financial crisis. The CEO of Deustche maintained that the bank conveyed the claims to the U.S. Securities and Exchange Commission, but no action was taken by SEC.

In May 2010, Sarbanes-Oxley whistleblower action was filed against the Deutsche Bank AG (NYSE:DB) (ETR:DBK), suing the bank for not valuing some assets in derivatives properly to hide the trading losses.

Bill Broeksmit, head of risk and capital optimization at Deutsche Bank in June 2011 said that the bank has been able to manage some of its credit derivative portfolio and is safe from incurring heavy losses on them.

The shares of Deutsche Bank AG (NYSE:DB) (ETR:DBK) declined 0.9 percent to €30.50 in the early morning trading at Frankfurt. The stocks of the company has slide down as much as 7.3 percent as against 8.4 percent decline in the 28 company Euro Stoxx Banks Index.