Deutsche Bank AG ("DB" or the Company) is a German multinational investment bank and financial services company.
The first Complaint filed on February 24, 2009, in the U.S. District Court for the Southern District of New York, case number 09-CV-1714, alleges that in October of 2006, DB consummated the offering of the 6.375% Securities pursuant to a false and misleading registration statement, selling 24 million 6.375% Securities at $25 per share for proceeds of approximately $600 million. Then, in November 2007, DB consummated the offering of the 7.35% Securities pursuant to a false and misleading registration statement, selling 32.2 million 7.35% Securities at $25 per share for proceeds of approximately $805 million. After the Offerings, on January 14, 2009, DB issued a press release announcing disappointing fourth quarter 2008 financial results, including a loss after taxes of €4.8 billion for the fourth quarter of 2008, reflecting market conditions that severely impacted results in the sales and trading businesses, “most notably in Credit Trading including its proprietary trading business, Equity Derivatives and Equities Proprietary Trading.” As a result of this disclosure, the prices of the Securities fell dramatically.
According to the Complaint, the Registration Statements issued in connection with the Offerings were false and misleading because they omitted the following true facts: (a) the Company failed to properly record provisions for credit losses, residential mortgage-backed securities, commercial real estate loans, and exposure to monoline insurers; (b) the Company’s internal controls were inadequate to prevent it from improperly recording provisions for credit losses, residential mortgage-backed securities, commercial real estate loans, and the Company’s exposure to monoline insurers; (c) the Company’s internal risk management systems were inadequate to limit the Company’s exposure to credit trading, equity derivatives, and proprietary equity trading; and (d) the Company was not as well capitalized as represented, and, notwithstanding the billions of dollars raised in the Offerings, the Company would have to raise an additional €10 billion by selling equity in the Company to the German government.
On March 19, 2009, a class action Complaint titled Norbert G. Kaess and Maria Farruggio, et al. v. Deutsche Bank AG, et al. was filed in the United States District Court for the Southern District of New York (No. 09-cv-2556), against DB, certain of its subsidiaries, certain of its officers and directors, and its underwriters, on behalf of a class of: 1) purchasers or acquirers of the 6.625% Noncumulative Trust Preferred Securities of Deutsche Bank Capital Funding Trust IX pursuant to the public offering in July 2007, and/or 2) purchasers or acquirers of the 7.35% Noncumulative Trust Preferred Securities of Deutsche Bank Capital Funding Trust X pursuant to the public offering in November 2007. Specifically, the Complaint alleges that Defendants violated Sections 11, 12(a)(2), and 15 of the Securities Act of 1933 by issuing a materially false and misleading registration statement, prospectuses, and other documents. These documents failed to disclose risks that: (a) the Company failed to properly record provisions for credit losses, residential mortgage-backed securities, commercial real estate loans, and exposure to monoline insurers; (b) the Company's internal controls were inadequate to prevent it from improperly recording provisions for credit losses, residential mortgage-backed securities, commercial real estate loans, and the Company's exposure to monoline insurers; (c) the Company's internal risk management systems were inadequate to limit the Company's exposure to credit trading, equity derivatives, and proprietary equity trading; and (d) the Company was not as well-capitalized as represented, and, notwithstanding the billions of dollars raised in the Offerings, the Company would have to raise an additional EUR 10 billion by selling equity in the Company to the German government.
On March 30, 2009, a class action titled Shirley Bachrach, et al. v. Deutsche Bank AG, et al. was filed in the United States District Court for the Southern District of New York, case number 09-CV-03075, on behalf of persons who acquired the 7.60% Trust Preferred Securities of Deutsche Bank Contingent Capital Trust III (the “Securities”) (NYSE:DTK) pursuant or traceable to a materially false and misleading registration statement and prospectus (collectively, the “Registration Statement”) issued in connection with the February 2008 offering of the Securities (the “Offering”). Specifically, the Complaint charges DB, certain of its subsidiaries, its senior insiders, its auditors and the investment banks that underwrote the Offering with violations of the Securities Act of 1933. The Complaint alleges that in February of 2008, DB consummated the Offering pursuant to the false and misleading Registration Statement, selling 70 million shares of the Securities at $25 per share for proceeds of $1.75 billion. The Registration Statement incorporated DB’s financial results for 2007 and statements in the Company’s 2006 Annual Report on Form 20-F filed with the SEC. After the Offering, on January 14, 2009, DB issued a press release announcing disappointing fourth quarter 2008 financial results, including a loss after taxes of €4.8 billion, reflecting market conditions that severely impacted results in the sales and trading businesses, “most notably in Credit Trading including its proprietary trading business, Equity Derivatives and Equities Proprietary Trading.” As a result of this disclosure, the price of the Securities fell dramatically. According to the Complaint, the true facts which were omitted from the Registration Statement were: (a) the Company failed to properly record provisions for credit losses, residential mortgage-backed securities, commercial real estate loans, and exposure to monoline insurers; (b) the Company’s internal controls were inadequate to prevent it from improperly recording provisions for credit losses, residential mortgage-backed securities, commercial real estate loans, and the Company’s exposure to monoline insurers; (c) the Company’s internal risk management systems were inadequate to limit the Company’s exposure to credit trading, equity derivatives, and proprietary equity trading; and (d) the Company was not as well capitalized as represented.
On August 11, 2009, Judge Deborah A. Batts issued an Order consolidating several actions and appointing lead Plaintiffs and lead Counsel. According to the Order, the six securities fraud class action lawsuits against DB and certain individual officers, subsidiaries, and underwriters of the Company are now consolidated. These actions allege claims under Sections 11, 12(a)(2), and 15 of the Securities Exchange Act of 1933. The consolidated class shall include all those who purchased or otherwise acquired DB's 6.375%, 6.55%, 6.625%, 7.35%, 7.60%, and 8.05% Securities, traceable to the Company's October 2006, May 2007, July 2007, November 2007, February 2008, and May 2008 Registration Statements and Prospecti, respectively. The caption of these consolidated actions shall be "In re Deutsche Bank AG Securities Litigation" and the files of these consolidated actions shall be maintained in one file under Master File No. 09 Civ. 1714 (DAB). Plaintiffs Norbert G. Kaess and Maria Farruggio are appointed lead Plaintiff and the Court approves the lead Plaintiffs’ selection of Murray, Frank & Sailer LLP as lead Counsel. Plaintiffs were instructed to file a Consolidated Complaint within 30 days of the date of this Order.
On August 18, 2009, a Plaintiff filed a motion for reconsideration of the August 11, 2009 Order appointing lead Plaintiff. On November 23, 2009, Judge Deborah A. Batts granted the motion for reconsideration. According to the Order, upon reconsideration, Belmont Holdings was appointed lead Plaintiff and Belmont Holdings' choice of Counsel, Coughlin Stoia Geller Rudman & Robbins LLP, and the Law Offices Bernard M. Gross, P.C., were appointed lead Counsel. In addition, Kaess and Farruggio were appointed co-lead Plaintiff and Kaess and Farruggio's choice of Counsel, Murray, Frank & Sailer LLP were appointed co-lead Counsel. Lead Plaintiffs were instructed to file a Consolidated Complaint within 30 days of the date of this Order.
On January 28, 2010, an amended Complaint was filed with the court in this action by the Plaintiffs against the Defendants.
On August 19, 2011, the Court issued an Order granting the Defendant's Motion to Dismiss with prejudice.
On August 9, 2012, the Court issued an Order granting the Defendants' Motion for Reconsideration; on reconsideration, Plaintiffs' remaining claims were dismissed with prejudice and without leave to replead. This case is now closed. On June 13, 2013, lead Plaintiffs filed a notice of their appeal of the above orders dismissing this case. On October 13, 2014, the Court of Appeals issued a Mandate affirming the District Court's judgment. On August 28, 2015, the Court of Appeals issued a Mandate vacating the Judgment of the District Court and remanding for further proceedings. On October 15, Plaintiff filed a third amended Complaint. On December 14, Defendants filed a Motion to Dismiss the third amended Complaint. On July 25, 2016, the Court issued an Order granting in part and denying in part Defendants' Motion to Dismiss.
On March 7, 2018, Plaintiffs filed a Motion to Certify a Class in this action. On October 2, the Court issued an Order Certifying the Class.
On November 11, 2019, the parties entered into a Stipulation of Settlement. The Court granted preliminary approval of the Settlement on February 27, 2020. On June 11, the Court granted final approval of the Settlement and entered Final Judgment.
