* Weimer, former Goldman Sachs partner, begins in January
* Deutsche Boerse seeks to move beyond insider trading probe
* Company can now function with "untainted leader" - investor (Adds reaction from Weimer, Faber, 2016 CEO compensation details)
FRANKFURT, Nov 16 (Reuters) - Deutsche Boerse named UniCredit banker Theodor Weimer as its new CEO on Thursday to steer the company away from an insider trading investigation and move on from a failed merger with the London Stock Exchange.
Weimer, who headed UniCredit's business in Germany, will take the reins from Carsten Kengeter, who resigned from the German exchange operator amid an ongoing insider trading investigation. Kengeter has denied any wrongdoing.
The changing of the guard propels Weimer to the pinnacle of German finance and comes at a crucial moment for Deutsche Boerse. It hopes to profit from Britain's decision to leave the European Union by capturing a portion of the lucrative euro clearing market that is currently centered in London.
Weimer said that Deutsche Boerse will work to make Frankfurt "a financial center that should become even stronger."
In his new role, Weimer joins the ranks of Germany's highest paid chief executives. Kengeter in 2016 was Germany's 7th highest-paid CEO on the DAX index of top companies, earning a total of 7.5 million euros ($8.8 million), according to consultancy HKP group.
Weimer, 57, will start his new job in January and has a contract for three years. He began his career in consulting for McKinsey and then Bain, before becoming an investment banker with Goldman Sachs where he was promoted to partner in 2004.
He joined Italian bank UniCredit in 2007, initially as head of global investment banking.
Weimer, an amateur pianist, fulfills many of the requirements that Joachim Faber, chairman of Deutsche Boerse's supervisory board, has said would be needed for the top job, including German as his native language, good political contacts and a strong knowledge of regulation.
"Theodor Weimer is a highly respected financial sector expert who understands the business of our clients very well," Faber said.
At Unicredit, where he was responsible for nearly 14,000 staff, he was well respected. "He has the necessary grace for the job at Deutsche Boerse," said an employee representative on Unicredit's works council in Germany. "Our preference would be for him to stay."
Separately, UniCredit said Michael Diederich would take over from Weimer.
"We are relieved that an appropriate successor could be found quickly," said Ingo Speich, fund manager at Union Investment. "Most importantly, Deutsche Boerse can now fully focus on business as usual with an untainted leader."
Deutsche Boerse has said that it will shy away from big acquisitions following the failed merger attempt with London Stock Exchange.
Kengeter, just months into his stint as CEO, designed the bold merger to create a global titan in the industry, but the plan collapsed, costing shareholders tens of millions of euros in advisory and legal fees.
It also irked local politicians because Kengeter had agreed to the merged company's headquarters being in London, rather than Frankfurt, a decision then made more complicated by Britain's vote to leave the European Union.
The deal ensnared Kengeter in an insider trading scandal that cost him his job. He bought 4.5 million euros in shares two months before the announcement of formal merger talks which were a boon to the share price and later aroused suspicions of insider trading.
Investigators raided his office and home on Feb. 1, and he has been under investigation ever since. All along, Kengeter and Deutsche Boerse have denied wrongdoing. Kengeter said he bought the shares through an official executive compensation program. ($1 = 0.8495 euros) (Reporting by Tom Sims and Andreas Framke; Additional reporting by Alexander Huebner; Editing by Susan Fenton and Elaine Hardcastle)