Business

Deutsche treat

Deutsche Bank’s co-head of equities Robert Karofsky took a leave of absence this week after being accused by one of his subordinates — who happens to be one of closest friends — of having an affair with his wife, sources inside the bank tell The Post.

Karofsky, 43, a top trader at the firm who ran Deutsche Bank’s Americas unit, took the leave for personal reasons on June 23, effectively immediately. A spokesman for the bank declined to comment further at the time.

But multiple sources told The Post that the Karofsky move followed a heated verbal confrontation late last week at the firm’s headquarters at 60 Wall St. between him and the pal, a senior trader, over the alleged affair.

The verbal volleys created a tense environment within Deutsche Bank’s insular trading ranks and have slowly become a source of water cooler gossip throughout the organization.

“He’s pretty much just avoided interacting with [Karofsky] since the incident,” one source said of the equities boss’ former pal. Making matters particularly sticky is the fact that Karofsky and the trader who worked under him have been longtime buddies, live near each other in Northern New Jersey and took family trips together.

Calls to Karofsky’s home number and messages left have not been returned.

Reached at work, the senior trader would only say, “It is a sensitive matter.” Through a source, the senior trader added that he was “looking to protect his children.”

A Deutsche Bank spokesman said that the firm “does not comment on personal matters.”

Both executives were recruited from Morgan Stanley and were a part of a group of eight traders hired in 2005 to grow the German institution’s cash equity trading franchise as Deutsche sought to go toe-to-toe with heavyweight Wall Street investment banks in the US.

Among traders, Karofsky is referred to as “Killer Karofsky” for his trading acumen. Off the trading floor, however, he’s described as a fair, mild-mannered, even-keeled boss who has garnered the respect of his charges and has “a magnetic personality.”

Deutsche Bank has tapped Barry Bausano, 46, an official who works in an area at the firm catering to hedge funds, to be head of equities.

At Deutsche Bank, the tension on the trading floor comes as the German bank is trying to boost its overall market share in equities trading in the aftermath of the credit crisis.

However, the firm has also been plagued by a number of high-profile departures in recent weeks, as bankers and traders groused about how they’ve been compensated at the big German bank.

Several execs, including star financial services exec David Heaton, have left for Morgan Stanley, while Mark Epley, head of a group that catered to private equity; Head of Global Banking for the Americas Jim DeNaut; and Thomas Barber have all jumped ship to Nomura Securities.

Some within the firm have described such moves as typical within a competitive banking franchise. mark.decambre@nypost.com