Deutsche Bank AG DB is under investigation by Italian authorities related to the bank’s sale of €7 billion ($8 billion) of Italian government bonds in 2011. It is alleged that the German banking giant misguided clients by stating in a research note that the sovereign debt of Italy was safe.Also during the first half of 2011, Deutsche Bank reduced its own holdings of the Italian bonds by nearly 90% as the country grappled with debt crisis.In its response, the bank said on Friday, “We are cooperating with the authorities in this inquiry. In 2011 we responded to a related inquiry made by Consob, and we provided information and relevant documents at that time.” Consob is market regulator of Italy. Deutsche Bank further added, “We do not believe there is a case to answer here and are confident that we acted appropriately.”Notably, five ex-employees of Deutsche Bank, including former CEOs Josef Ackermann and Anshu Jain and the current co-CEO Juergen Fitschen, are under probe in the case.The latest legal issue cropped up at a time when Deutsche Bank’s co-CEO John Cryan is expediting efforts to revamp the bank and boost profitability while remaining focused on ensuring high internal operating standards and tightening the internal policies. Though the company expects to settle significant cases this year, litigation headwinds are not likely to ease soon as the bank continues to struggle with numerous lawsuits and regulatory proceedings.A potential legal action will not only add to the litigation burden of Deutsche Bank but also expose the company to high legal expenses stemming from the case.Deutsche Bank currently carries a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the foreign banks space include Banco Macro S.A. BMA, Grupo Financiero Galicia S.A. GGAL and Shinhan Financial Group Company Limited SHG, each sporting a Zacks Rank #1 (Strong Buy).Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report DEUTSCHE BK AG (DB): Free Stock Analysis Report SHINHAN FIN-ADR (SHG): Free Stock Analysis Report GRUPO GALIC ADR (GGAL): Free Stock Analysis Report BANCO MACRO-ADR (BMA): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research