UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
 

----------------------------------------------------------- HADASSA Y. BUXBAUM,                       Plaintiff,            -against- DEUTSCHE BANK A.G. and ROLF-ERNST BREUER,                       Defendants. -----------------------------------------------------------

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[98CIV.8460] CLASS ACTION COMPLAINT [filed Dec. 1, 1998] JURY TRIAL DEMANDED

Plaintiff, individually and on behalf of all other persons similarly situated, by her undersigned counsel, alleges the following upon knowledge with respect to her own acts, and upon other facts obtained through an investigation conducted by her counsel, which included, among other things. a review of the public announcements made by defendants, Securities and Exchange Commission ("SEC") filings, press releases and media reports regarding Bankers Trust Corporation ("BT") and Deutsche Bank A.G. ("Deutsche Bank"), as specifically set forth herein.

3. The jurisdiction of this Court is based on Section 27 of the Exchange Act and Section 22 of the Securities Act, 15 U.S.C. § 78aa, and 28 U.S.C. § 1331 (federal question jurisdiction).

4. Venue is proper as many of the acts, transactions and conduct alleged herein, including the dissemination to the investing public of the misleading statements at issue, occurred in substantial part in this District, BT maintains its corporate headquarters and executive offices within this District and Deutsche Bank maintains its United States headquarters in this District.

5. In connection with the acts and conduct alleged in this Complaint, the defendants, directly or indirectly, used the mails and instrumentalities of interstate commerce.

7. Defendant Deutsche Bank is a corporation duly organized and existing under the laws of Germany, and maintains its world headquarters in Frankfurt, Germany. Deutsche Bank is Germany's largest bank with $675 billion in assets. Deutsche Bank's United States operations are based at Deutsche Bank Americas Holding Corporation, 31 West 52nd Street, New York, New York.

8. Defendant Rolf-Ernst Breuer ("Breuer") is and has been at all relevant times hereto the Chief Executive Officer of Deutsche Bank.

10. Members of the Class are so numerous that joinder of all members is impracticable. As of October 31, 1998, there were 95,304,919 shares of BT common stock outstanding held by thousands of holders of record. While the exact number of Class members is unknown to the plaintiff at this time and can Only be ascertained through appropriate discovery, plaintiff believes there are thousands of Class members who sold BT common stock during the Class Period.

11. BT common stock is traded on the New York Stock Exchange ("NYSE"), an efficient and developed securities market. Thousands of brokers nationwide had immediate access to trading information on these shares through the NYSE. Information concerning those companies are displayed within minutes of the transactions taking place.

12. Plaintiff's claims are typical of the claims of the members of the Class. Plaintiff and the members of the Class have sustained damages because of defendants' unlawful activities alleged herein. Plaintiff has retained counsel competent and experienced in class and securities litigation and intends to prosecute this action vigorously. The interests of the Class will be fairly and adequately protected by plaintiff. Plaintiff has no interests which are contrary to or in conflict with those of the Class plaintiff seeks to represent.

13. A class action is superior to all other available methods for the fair and efficient adjudication of this controversy, Plaintiff knows of no difficulty to be encountered in the management of this action that would preclude its maintenance as a class action.

14. Common questions of law and fact exist as to all members of the Class and predominate over any questions solely affecting individual members of the Class. Among the questions of law and fact common to the Class are:

a. whether defendants violated Sections 10(b) and 20(a) of the Exchange Act, and SEC Rule 10b-5 promulgated thereunder;

b. whether defendants participated in and pursued the common course of conduct complained of herein;

c. whether releases and statements disseminated to the investing public omitted and/or misrepresented material facts about BT;

d. whether the market price of BT common stock during the Class Period was artificially depressed due to the nondisclosure and/or misrepresentations complained of herein;

e. whether defendants acted knowingly, wilfully or recklessly in omitting to state and/or misrepresenting material facts; and

f. whether the members of the Clan have sustained damages and, if so, the proper measure of such damages.

20. On October 19, 1998, Dow Jones Online News reported that BT had held talks with Deutsche Bank about a possible takeover by the German bank, and further reported that the London-based Financial Times reported Deutsche Bank had held talks with Bankers Trust but that details remained sketchy.

21. On October 20, 1998, Dow Jones Online News reported that Deutsche Bank "declined to comment Tuesday on a newspaper report that it is in talks for a possible takeover of Bankers Trust." According to a Deutsche Bank spokesman, "We don't and won't comment on market speculation."

22. On October 21, 1998, defendants refused to comment on the rumors of a Deutsche Bank takeover of BT:

Deutsche Bank AG refused to comment on a report Tuesday that it is in talks to acquire Bankers Trust, the seventh-largest U.S. bank, but it's clear the German bank is anxious to attempt to fulfill its expansion strategy in the all-important U.S. market -- particularly now that share prices have dropped 40% or more.

Sources within the bank said the speculation about Bankers Trust was "overdone." A high-level official said Deutsche's Frankfurt-based development unit was unaware of any talks with Bankers Trust. He didn't discount, however, the possibility that some form of informal approach was made to Bankers Trust. along with a handful of other possible candidates in the U.S., as many banks are likely doing at the moment.

23. On October 21, 1998, The Wall Street Journal reported that:

Germany's Deutsche Bank AG, eager to expand in North America, has approached Bankers Trust Corp. about a possible merger, several people familiar with the situation said.

The approach hasn't yet led to serious merger discussions, and it is by no means certain that the overture will culminate in a transaction, these people cautioned. These people also said that Bankers Trust Chairman and Chief Executive Frank Newman had discussed the approach with Deutsche ....

Shares of Bankers Trust (BT) rose $4.18 3/4 to $58.93 3/4 after the Financial Times reported Deutsche Bank has opened preliminary takeover talks with the seventh-largest bank holding company in the United States. The newspaper said sources close to the talks stressed the discussion is in the early stages.

Bankers Trust declined to comment, while Deutsche Bank management board member Michael Dobson said: "We have been linked with a number of banks before, and these reports have come to nothing."

25. Following BT's report of a huge quarterly loss on October 22, 1998, Deutsche Bank decided the timing was appropriate to close the deal on the BT takeover. Deutsche Bank's investment bankers at Goldman, Sachs & Company, along with BT's in-house investment bankers, began finalizing the terms of the takeover. The New York Times at C8, Dec. 1, 1998.

26. Based on the rumors of an impending transaction between BT and Deutsche Bank, the price per share of BT common stock soared from $52.00 per share on October 19, 1998 to a high of $68.875 on October 23, 1998.

The False And Misleading Statements

28. On October 25, 1998, defendant Breuer, Deutsche Bank's CEO, stated emphatically that the bank was not in any talks with BT:

FRANKFURT (Dow Jones)--Deutsche Bank AG (G.DBK) Chairman Rolf Breuer said Sunday the bank isn't in talks with Bankers Trust (BT) for a possible takeover of the U.S. investment bank.

"Everyone talks with one another in our industry but there haven't been any talks for a takeover," the German weekly Der Spiegel reported in its forthcoming edition. A spokesman at Deutsche Bank confirmed the accuracy of the report.

29. On October 26, 1998, Deutsche Bank's statement that it was not involved in takeover talks with BT was republished:

FRANKFURT -- Deutsche Bank AG Chairman Rolf Breuer said the bank hasn't held talks to take over U.S. investment bank Bankers Trust but is pursuing plans to build up its global business, a German magazine reported.

Last week a news report sparked speculation that Deutsche Bank was targeting Bankers Trust, the seventh-largest U.S. bank, to fulfill the German bank's stated strategy of expanding its business with a U.S. acquisition.

In an interview with Germany's Der Spiegel magazine released in advance of its publication today. Mr. Breuer didn't deny Deutsche Bank had talked with Bankers Trust but said then were no acquisition discussions. "In this industry, everyone talks to everyone," he said. "But there were no takeover talks." Asked if Deutsche Bank is interested in Bankers Trust. Mr. Breuer said,

"There is nothing that I would be able to report to the shareholders."

30. In response to the flat denials of Deutsche Bank as to the existence of takeover talks with BT, the price per share of BT's common stock fell to $59.375.

The Truth is Revealed

32. On November 23, 1998, BT and Deutsche Bank issued a joint press release in which they announced that they were in "advanced stages of negotiations concerning a potential cash merger combination at a proposed price of $93 per" BT share.

33. On November 24, 1998, The New York Times reported that the merger discussions had been ongoing since the Summer of 1998. It was reported that Deutsche Bank initiated merger talks with BT when a Deutsche Bank board member, Ronaldo Schmitz, invited Bankers Trust's CEO, Frank Newman, to dinner at the St. Regis Hotel in Manhattan. Thereafter, the merger discussions continued with BT's CEO, Frank Newman, meeting with defendant Breuer at an International Monetary Fund conference in Washington in September and then at Mr. Breuer's Frankfurt home in October. The New York Times, at C2, Nov. 24, 1998.

34. In a press release on November 30, 1998, Deutsche Bank announced the:

[A]cquisition of Bankers Trust Corp., in a $10.1 billion deal that will create the world's largest financial institution with assets of more than $800 billion. Deutsche Bank has offered Bankers Trust shareholders $93 a share to seal one of the largest takeovers of a U.S. financial institution by a foreign bank. The boards of both banks approved the offer yesterday.

36. The defendants, and each of them, carried out a plan, scheme and course of conduct which was intended to and did: (i) deceive the investing public, including plaintiff and other Class members, as alleged herein; (ii) artificially deflate the market price of BT common stock; and (iii) cause plaintiff and other members of the Class to sell BT common stock at deflated prices. In furtherance of this unlawful scheme, plan and course of conduct, defendants, and each of them, took the actions set forth herein.

37. Defendants (a) employed devices, schemes. and artifices to defraud; (b) made untrue statements of material fact and/or omitted to state material facts necessary to make the statements made not misleading; and (c) engaged in acts, practices and a course of business which operated as a fraud and deceit upon the sellers of BT securities in an effort to maintain artificially low market prices for such securities in violation of Section 10(b) of the Exchange Act and Rule 10b-5. All defendants are sued either as primary participants in the wrongful and illegal conduct charged herein or as controlling persons as alleged below.

38. The purpose and effect of defendants' plan and course of conduct was to keep secret the pending acquisition of BT so as to artificially depress the price of BT stock to enable Deutsche Bank to purchase the outstanding shares of BT at an artificially low price. By affirmatively misleading the investing public about the ongoing merger discussions and the likelihood of the merger going forward, Deutsche Bank was able to save hundreds of millions of dollars on the purchase price of BT.

39. Had plaintiff and the other members of the Class known of the material information which defendants failed to disclose, they would not have sold their shares of BT stock at the artificially depressed prices they did.

40. By virtue of the foregoing, defendants have violated Section 10(b) of the Exchange Act, and Rule 10b-5 promulgated thereunder.

41. As a direct and proximate result of defendants' wrongful conduct, plaintiff and the other members of the Class suffered damages in connection with their sale of BT securities during the Class Period.

43. Defendant Breuer acted as a controlling person of Deutsche Bank within the meaning of Section 20(a) of the Exchange Act as alleged herein. By virtue of his executive position, as alleged above, defendant Breuer had the power to influence and control and did influence and control, directly or indirectly, the decision-making of the Company, including the content and dissemination of the various statements which plaintiff contends are false and misleading.

44. By virtue of the foregoing, defendant Breuer has violated Section 20(a) and is liable to the plaintiff and the Class.

WHEREFORE, plaintiff prays for relief and judgment, as follows:

(a) Determining that this action is a proper Class action, designating plaintiff as Lead Plaintiff and certifying plaintiff as Class representative under Rule 23 of the Federal Rules of Civil Procedure and her counsel as Lead counsel;

(b) Awarding compensatory damages in favor of plaintiff and the other Class members against all defendants for all damages sustained as a result of defendants' wrongdoing, in an amount to be proven at trial, including interest thereon;

(c) Awarding plaintiff and the Class their reasonable costs and expenses incurred in this Action, including counsel fees and expert fees; and

(d) Such other and further relief as the Court may deem just and proper.

Source: Scanned paper copy of court-stamped document