Deutsche Bank AG officials are reviewing whether some employees exaggerated demand as they marketed new securities backed by risky auto loans, potentially suppressing yields for investors, according to a person with knowledge of the matter.

The bank has looked at communications between the employees and investors to determine whether such marketing practices were normal salesmanship or if they crossed a line, said the person, who asked not to be named because the matter is private. The lender has also looked at whether preferential treatment in the allocation of the bonds may have improperly given the biggest investors a leg up over smaller firms, the person said.

The bank’s inquiry comes as the U.S. Securities and Exchange Commission expands an industrywide crackdown on trading and sales practices in markets where mortgages, auto loans and other debt are bundled into securities. It’s also raising new questions in the booming market for subprime auto-loan securities that some regulators have likened to the mortgage-bond binge of the 2000s.

Perceived Demand

Frankfurt-based Deutsche Bank underwrote $6.79 billion of the $102 billion of U.S. auto securitizations issued in 2015, making it the eighth-most active in data tracked by Bloomberg. Amanda Williams, a spokeswoman for the bank, declined to comment.

Trumping up demand during the bond-marketing process can potentially lure investors into accepting lower yields than they would have otherwise. Allocating the debt to preferred clients can also create an uneven playing field that shuts some investors out of the deal. Such practices, seen as a way of winning business in other capital-markets transactions, have come under scrutiny in debt markets before.

Deutsche Bank’s securitization business has faced additional pressures internally, including plans by Co-Chief Executive Officer John Cryan to “cut severely” the lender’s most capital-intensive businesses.

Litvak Case

A separate unit that trades securitized debt also is among the Wall Street trading groups that came under scrutiny of regulators after former Jefferies Group LLC trader Jesse Litvak was accused of criminal securities fraud for lying to clients on mortgage-bond transactions. While Litvak was convicted, the ruling was overturned last month because of excluded testimony from an expert witness who contended that such misrepresentations are widespread. The U.S. government is moving ahead with more than a dozen criminal and civil cases it has been preparing against bond traders across a number of firms.

It isn’t clear if any of the activities in question at Deutsche Bank would be interpreted as offenses by the government. But since the Litvak case, bond traders have become concerned that widespread business practices could land them in trouble.

Securities regulators have been asking more questions about Wall Street’s bond-allocation practices in recent years as investors snap up record amounts of new fixed-income securities.

Subpoenas Received

The Justice Department and state regulators have also been looking more closely at auto financing as outstanding auto debt surges past $1 trillion and lending standards weaken.

Lending units of General Motors Co. and Santander Consumer USA Holdings Inc. are among firms to have received subpoenas by U.S. authorities over the past few years. New York State was also said to be examining as many seven auto-finance firms, a person with knowledge of the matter said last year.

General Motors has said in regulatory filings that its finance unit received a subpoena in July 2014 from the Justice Department asking for “documents relating to the securitization of sub-prime automobile loans,” and that it was cooperating with the government’s investigation. Santander has said in filings that it was complying with requests from authorities, including the SEC, to produce and preserve documents related to auto-loan securitization and underwriting dating as far back as 2007.

Investors’ appetite for subprime auto debt is creating a “market ripe both for fraud and also a sudden rise in delinquencies,” Craig Weiner, a partner at Robins Kaplan LLP, said in a paper predicting massive litigation coming to auto securities.

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