Scandal-plagued Deutsche Bank has hired attorney Stefan Simon to join its management board Aug. 1 to take charge of the bank's legal and regulatory affairs during a time of turmoil and rebuilding.

Simon replaces Sylvie Matherat, the former chief regulatory officer who apparently is being blamed for the Frankfurt, Germany-based bank's failure to emerge from a history of misconduct, according to various news reports. Publicly the bank praised her work.

Simon's hiring was one of several leadership changes and part of the bank's restructuring effort as it seeks to restore its damaged reputation as well as its flailing financial condition. He will have the title chief administrative officer.

Simon, 49, knows full well the bank's legal problems. He joined Deutsche's external supervisory board three years ago and chaired its integrity committee. Before that, as a partner at Bonn, Germany-based law firm Flick Gocke Schaumburg, he was a lawyer and tax consultant who had advised the bank.

He has been an honorary professor at the University of Cologne since 2008 and is considered an expert in governance, compliance and corporate law. With his appointment, Deutsche Bank said it “is reaffirming its commitment to good corporate governance and a trusted relationship with the regulatory authorities.”

On July 7 the supervisory board—similar in some ways to a board of directors—ousted three members of the bank's internal management board, a nine-member group that sets business strategy and oversees divisions.

One of the ousted members was Matherat, the chief regulatory officer who joined Deutsche in 2014 from Banque de France.

In announcing the management board changes, bank Chairman Paul Achleitner said, “Under Sylvie Matherat's leadership the bank has significantly invested in technology and personnel and strengthened its control systems. She has not only systematically and technologically advanced the bank in the area of regulation, compliance and anti-financial crime but she has also significantly contributed to Deutsche Bank's new compliance and risk culture.”

In an email to bank staff about the rebuilding, which includes the layoff of some 18,000 employees, CEO Christian Sewing said, “One thing is certain—we will not make any sacrifices when it comes to our control functions. On the contrary, we can and will further improve them. That is why we are bringing risk management together with the divisions for compliance and anti-financial crime. These areas which are of utmost importance to our integrity and to trust in our bank will therefore be combined in a single division led by [chief risk officer] Stuart Lewis.”

The bank has had three general counsel since 2015, with the most recent, Florian Drinhausen, taking over in early 2018. Deutsche Bank's legal problems have included:

• In 2015 Deutsche was fined a record $2.5 billion by U.S. and U.K. authorities for its long-term role in the international interest rate scam.
• The same year the U.S. fined the bank $258 million for doing business with sanctioned countries like Iran, Syria, Libya, Sudan and Myanmar.
• In 2017, Deutsche Bank was fined $630 million by U.S. and U.K. authorities over allegedly laundering up to $10 billion of Russian money through sham trades.
• U.S. prosecutors in 2017 also accused the bank of having contributed to the 2008 global financial crisis by selling and pooling toxic financial products, including faulty mortgage-backed securities. The bank agreed to a $7.2 billion settlement.
• More recently the bank remains under investigation for its role in Europe's latest financial scandal, involving laundering over $200 billion of Russian money through Denmark's Danske Bank.
• In addition German prosecutors are investigating another money laundering allegation involving Deutsche Bank using a subsidiary to help clients avoid taxes. Deutsche has said it is cooperating with investigators.