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Deutsche Bank Background Information

Home Investor Claims Brokerage Firm Misconduct Deutsche Bank Background Information

Deutsche Bank is one of the largest multinational banks, operating worldwide with 73,000+ employees in 73 countries.  It headquarters is in Frankfurt, Germany, but banking, its largest division, is headquartered in London.

Deutsche Bank was founded in Germany in 1870 and by 1900 had branches in London, Shanghai and Yokohama. It underwrote the Northern Pacific Railroad in the US and the Baghdad Railway, and provided the capital for Krupp Steel and the Bayer Company.

Following Germany’s defeat, Allied authorities ordered Deutsche’s breakup into ten regional banks in 1948.  These were later consolidated into 3 banks in 1952, which merged in 1957.  After German reunification in 1990, takeover of the East German government bank completed the fold.

In 1995, Deutsche Bank began a transformation from a commercial bank to an investment bank and by 2005, 75% of its revenues came from investment banking.  In that decade, its return on equity rose from 4% to 25%.

In 1999, Deutsche Bank acquired Banker’s Trust.  The bank’s NY headquarters were soon destroyed in the 9/11 attack when debris from the Twin Towers hit the building. When their insurance carrier failed to pay Deutsche Bank sued.  A major component of the Banker’s Trust deal was its 200 year-old U.S. investment bank, Alex Brown & Sons. Of note: In 1808, Alex Brown organized the first public offering in the US, that of the Baltimore Water Company.

Deutsche Alex Brown is a U.S. securities brokerage firm and is the client services division of Deutsche Bank Securities, the investment arm of the bank. This division provides a range of advisory, brokerage, research and investment services to individual and institutional investors in the US.  It performs research on more than 2,500 stocks and provides advice on mergers and acquisitions, acquisition finance, and project finance.

Shepherd Smith Edwards & Kantas LTD LLP Law Helps with Claims Against Deutsche Bank

Our law firm represents institutional and individual investors nationwide with significant losses in their portfolios, retirement plans or investment accounts.  Our attorneys and staff have more than 100 years of combined experience in the securities industry and in securities law. Several of our lawyers served for years as Vice President or Compliance Officer of brokerage firms.

Each lawyer and staff member of our firm is devoted to assisting investors to recover losses caused by unsuitability, over-concentration, fraud, misrepresentation, self-dealing, unauthorized trades or other wrongful acts, whether intentional or negligent.  We have handled over a thousand cases against hundreds of large and small investment firms, including claims against Deutsche Bank, Bankers Trust and/or Alex Brown.

Call us at (800)259-9010 or contact us through our Website to arrange a free confidential consultation with an attorney to discuss your experiences with an investment advisor or financial firm which resulted in losses.

Additional Information on Deutsche Bank:

Deutsche Bank Fined $87 Mil. In Research Scandal

Deutsche Bank Securities was fined $87.5 million by federal and state regulators for its role in an industry wide research scandal, including a penalty of $7.5 million for failing to timely produce e-mails in the investigation.  An injunction was also issued to prevent the firm from engaging in those practices which constituted its violations.

The Securities and Exchange Commission, the North American Securities Administrators Association (NASAA), NASD, Inc., New York Stock Exchange (NYSE) and state securities regulators, including California’s Department of Corporations filed enforcement actions against Deutsche Bank Securities and a number of other Wall Street securities firms.

The subpoenas were issued by the regulators as part of an ongoing investigation into claims regarding fraudulent research. The $7.5 million additional penalty was for failing to promptly produce all e-mail, which delayed the investigation for over a year.

Deutsche Bank Securities was also required to dramatically reform its practices, including separating its research and investment banking departments at the firms, restructuring how research is reviewed and supervised, prohibiting analysts from being compensated for investment banking activities and making independent research available to investors.

Deutsche Bank’s CEO Indicted for Payoffs

Deutsche Bank’s CEO, Josef Ackermann, was indicted on for his involvement in a committee that approved alleged “payoffs” to executives of Mannesmann, a British telecom company. The payments, totaling $108 million dollars were made to Mannesmann’s former CEO and a number of other Mannesmann employees after the company was taken over by Vodafone.  Ackermann and five others have been accused of breach of trust against shareholders.

Deutsche Bank Fined Again over E-mails

After being fined $7.5 million for withholding e-mails, Deutsche Bank was fined again, this time $1.65 million, for failing to retain e-mail records.

The SEC, NYSE, and NASD announced the fine and required Deutsche Bank, and other the firms which were also fined, to review their document storage procedures.

Among the documents subpoenaed by regulators, but destroyed, were records detailing how Deutsche Bank voted regarding the Hewlett Packard/Compaq merge. Federal attention was raised after a lawsuit by its former founder against Hewlett Packard questioned the relationship of the company with Deutsche Bank. Although later dismissed, the suit alleged that HP “coerced”

Deutsche Bank (a holder of 25 million shares) into voting for an HP/Compaq merger by threatening to withhold its business from the firm should it vote against the move.

Deutsche Bank Fined over High Yield Bond Trades

The NASD announced it ordered Deutsche Bank Securities, Inc. and other firms to each pay $5 million for rule violations relating to trading in corporate high yield bonds. Deutsche’s securities unit was cited for charging excessive markups or markdowns, inadequate record keeping and supervision violations. The firms were also ordered to revise their written supervisory procedures for high yield bond sales and purchases within 60 days.

Deutsche Bank Securities and others were also charged with trade-reporting violations.  Deutsche Bank and one other firm were charged with failing to register one or more supervisors on the firms’ high yield desks.

“NASD rules require that firms sell all securities, including corporate high yield debt, at fair prices,” said the NASD’s Mary L. Schapiro. “NASD markup policy has been clear that markups and markdowns generally should not exceed5 percent and, for most debt transactions, that figure should be lower.

Numerous SEC and court rulings have reiterated these principles throughout the years. In the cases we announce today, markups and markdowns were clearly outside these well-established guidelines.”

The NASD found that Deutsche Bank charged markdowns ranging from 9.6 percent to 16.6 percent on seven pairs of trades. The firm bore little or no risk in these transactions.

Deutsche Bank Fined For Reporting Violations

The NASD censured, fined $225,000, and required Deutsche Bank Securities to revise its written supervisory procedures, for lapses in “short interest” reporting.

The findings also stated that the firm’s short positions were incorrectly classified and the firm failed to make corrections in a timely and effective manner.  Positions were also reported to NASD inaccurately and incorrectly netted short positions against long positions.

In addition, NASD found that the firm’s supervisory system failed to provide for supervision reasonably designed to achieve compliance with applicable securities laws, regulations, and NASD rules concerning short interest reporting.

From The Blog

Akamai Technologies Inc’s ARS Lawsuit Against Deutsche Bank Can Proceed

The U.S. District Court for the District of Massachusetts says that, under the 1934 Securities Exchange Act and the Massachusetts’ Uniform Securities Act, Akamai Technologies Inc.’s (AKAM) auction-rate securities lawsuit that seeks to hold Deutsche Bank AG liable for $200 million in losses can proceed. The judge ruled that the Internet content delivery firm had properly pleaded a material misrepresentation or omission in violation of Section 10(b) of the '34 Securities Exchange Act, which is necessary for a control person claim under Section 20(a). The court also held that Akamai clearly pleaded Deutsche Bank's control over Deutsche Bank Securities Inc., the subsidiary that allegedly advised the company to buy the toxic ARS.

Per the court, DBS was the broker and investment adviser for Akamai Securities Corp. and Akamai Technologies Inc. Akamai told the investment adviser that it wanted to put money in securities that were liquid and safe so it could access the funds when needed. DBS told Akamai that ARS were safe, liquid, and never failed even though the financial firm allegedly knew that they had done so before and, in fact, posed a higher level of risk than what it led Akamai to believe. Even in August 2007, when Deutsche Bank knew that the demand for ARS was going down and the risk of ARS auctions failing was rising, the investment adviser still allegedly did not notify Akamai that the market was changing.

When the ARS market did fall in 2008, Akamai was left with over $200 million in illiquid securities. Its securities fraud lawsuit also claims that even as DBS continued to claim that the securities were liquid and safe, resulting in Akamai increasing its ARS investments, the investment bank was decreasing its own exposure to the market.


Related Web Resources:
Deutsche Bank Loses Bid to Dismiss Control Person Claims by ARS Investor, BNA

Frozen in time, Boston.com, February 16, 2010

Akamai Technologies, Inc. and Akamai Securities Corp. v. Deutsche Bank AG (PDF)

Massachusetts’ Uniform Securities Act


More Blog Posts:
Credit Suisse Broker Previously Convicted for Selling High Risk ARS is Barred from Future Securities Law Violations, Institutional Investors Securities Blog, February 12, 2011

Merrill Lynch Doesn’t Have to Arbitrate ARS Claims by LSED, Says Appeals Court, Institutional Investors Securities Blog, December 22, 2010

Citigroup Global Markets to Pay Back $95.5M Over ARS Sold to LandAmerica Exchange Fund, Institutional Investors Securities Blog, November 11, 2010


Our securities fraud attorneys represent clients whose investments were frozen during the auction-rate securities market crisis. Unfortunately, many investors were told that that ARS were liquid like cash and low risk.

Read More →

10 Former Barclays and Deutsche Bank Traders Charged with Rigging Euribor

Prosecutors in the United Kingdom have charged 10 former Barclays Plc (BARC) and Deutsche Bank AG (DEB) employees with rigging the Euribor benchmark. The ex-Deutsche Bank traders are Christian Bittar, Achim Kraemer, Joerg Vogt, Andreas Hauschild, Kai-Uwe Kappauf, and Ardalan Gharagozlou. The former Barclays traders are Philippe Moryoussef, Colin Bermingham, Sisse Bohart, and Carlo Palombo. An unidentified 11th trader is also expected to be charged.

Except for Bermingham, the rest of the defendants live outside Great Britain. These are the first charges in the Serious Fraud Office’s probe of Libor rigging involving the Euro interbank offered rate. More individuals are expected to be prosecuted.

Earlier this week, Bittar, who was once among Deutsche Bank’s most successful traders before he was let go in 2011, won a separate ruling. Although his name wasn’t mentioned in the Financial Conduct’s ruling in an interest rate benchmark's manipulation probe into his former employer, Bittar contended that he was clearly identifiable in the details of the settlement. Bittar argued that because of this he was entitled to look at FCAs settlement with Deutsche Bank prior to its disclosure.

Global regulators had fined Deutsche Bank $2.5 billion earlier this year and the FCA published a document detailing the wrongdoing that included the term
“manager B” when referring to one of its managers. Bittar said that term clearly referred to him. A London judge said that Bittar was indeed improperly identified.

Last year, the FCA put out a penalty notice against Bittar directly proposing to fine him 10 million pounds because he had been purportedly “knowingly concerned” with Deutsche Bank’s submissions related to Libor. The regulator sought to bar him from the industry. That notice, however, is on hold at the moment.

Meantime, six interdealer brokers from RP Martin, ICAP (IAP), and Tullet Prebon remain on trial in London for allegedly helping ex-UBS (UBS) and Citigroup (C) trader Tom Hayes rig Libor. Hayes was convicted and sentenced to 14 years behind bars for conspiring to rig the benchmark.

In the United States, ex-Rabobank (RABO) traders Anthony Allen and Anthony Conti were found guilty in the first Libor trial to take place in this country. A New York Jury said that the two men, who are British citizens, rigged US dollar and yen Libor.

Prosecutors said the two men were involved for five years in the Libor rate rigging conspiracy. Testimony from other ex-Rabobank traders who had entered guilty pleas helped convict the two men.

Conti and Allen plan to appeal the verdicts. Their lawyers claim that unlike other traders at Rabobank who did actually try to manipulate Libor, the two men turned in rate estimates that were honest. The attorneys said that the cooperating witnesses lied to get lighter sentences and that documents used to prosecute the men were taken out of context.

At The SSEK Partners Group our securities fraud law firm has helped thousands of investors recoup their losses. Retaining an experienced securities lawyer to represent you increases your chances of maximum financial recovery. You do not pay for any legal fees unless you receive the compensation you are owed.

Ten Ex-Deutsche Bank, Barclays Traders Charged in Euribor Probe, Bloomberg, November 13, 2015

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Anschutz Corp.’s Securities Fraud Lawsuit Against Deutsche Bank and Credit Rating Agencies Over Their Alleged Mishandling of Auction-Rate Securities Can Proceed, Says District Court

The U.S. District Court for the Northern District of California says that the auction securities lawsuit filed by Anschutz Corp. against Deutsche Bank Securities Inc. and a number of credit rating agencies can proceed. Anschutz bought DBSI ARS between July 206 and August 2007 through Credit Suisse. The plaintiff is seeking damages and other relief related to the ARS it bought that was underwritten by DBSI, which also served as its broker-dealer.

Anschutz contends that it bought the securities believing that they were liquid because of the DBSI’s deceptive and manipulative activities. The plaintiff claims that by serving as market maker, DBSI ensured that the auctions would be successful as long as it kept supporting the bids. To make the ARS appear liquid, DBSI also allegedly “manipulated the market” by putting in support bids for every auction that the securities were involved in as well as for other ARS for which it was the lead or sole broker-dealer. When DBSI stopped making bids in July 2007, the auctions failed the following month. Anschutz contends that not only did DBSI know this would happen, but also, by acting as the only broker-dealer that could take part in certain securities’ auctions, the financial firm made it seem as if there was enough third party demand and was able to lower the auctions’ interest rates.

Regarding its claims against rating agencies, Anschutz says that the latter relaxed their rating system to get DBSI’s business. The plaintiff contends that the AAA ratings that the agencies issued were misleading and false but knew that was the way to get paid. Anschutz also says that the agencies should have known or knew that DBSI was creating an artificial market for the ARS.

Related Web Resources:
Deutsche Bank, Rating Agencies Fail To Topple Investor Suit Over ARS Activities, BNA Broker/Dealer Compliance Report, March 30, 2011

Anschutz Corp. v. Merrill Lynch & Co. Inc.


More Blog Posts:
Akamai Technologies Inc’s ARS Lawsuit Against Deutsche Bank Can Proceed, Institutional Investor Securities Blog, March 4, 2011

Credit Suisse Broker Previously Convicted for Selling High Risk ARS is Barred from Future Securities Law Violations, Institutional Investor Securities Blog, February 12, 2011

NASAA Says Investors with Frozen Auction-Rate Securities Should Ask Investment Firms About Buyback Opportunities, Stockbroker Fraud Blog, November 19, 2008

Contact our securities fraud lawyers to find out whether you have grounds for an ARS lawsuit.

Read More →

BaFin Report Accuses Deutsche Bank Executives of Negligence in Libor Rigging

According to a report by German financial regulator BaFin, senior management at Deutsche Bank (DB) allegedly behaved “negligently” related to the rigging of Libor rates. The European regulator has been investigating the bank over its possible involvement in the manipulation of the inter-bank rate setting process.

BaFin contends that Deutsche Bank’s outgoing joint leader Anshu Jain may have lied to the European nation’s central bank, the Bundesbank, by purposely making inaccurate statements” about rate rigging during a 2012 interview. The regulator wants Deutsche Bank to be subject to special supervisory measures.

The Financial Times reports that, Jain, who resigned from his position and will officially step down at the end of the month, is accused of telling Bundesbank that he did not know about the rumors about possible rigging even though e-mails about a meeting on this matter were forwarded to him in 2008. Deutsche Bank, however, maintains that Jain did not lie or mislead the German central bank during the interview. The bank said that the BaFin report confirms its own findings that no current or ex-members of its Management Board or Group Executive Committee directed firm employees to rig intra-bank offered rate submissions or knew of any attempted manipulations before June 2011.

Deutsche Bank has paid over $9 billion in fines to resolve claims of Libor rigging. In April, the bank was fined $2.5 billion for manipulating interest-rate benchmarks.

BaFin’s report also brings up questions about whether one of Deutsche Bank’s New York-based traders tried to rig ISDAfix, which is a benchmark for yearly swap rates for swap transactions. The German regulator said that the trader manipulated the benchmark to enhance the value of an option at the expense of global investment management firm Pimco. An undocumented verbal warning was issued to the trader after the fund manager complained.

In other ISDAfix-rigging news, the Commodity Futures Trading Commission continues to investigate numerous banks. Several of these firms receive subpoenas from the regulator in 2013. To date, Barclays PC (BARC) is the only bank to agree to pay a fine to settle the allegations. However, according to Bloomberg, a source knowledgeable about the CFTC’s ISDAfix probe said that Barclays wasn’t the only bank to manipulate this benchmark.

The CFTC said that by trying to rig ISDAfix, Barclays stood to profit on derivatives trades with clients that wanted to hedge against interest rate movements. E-mails and recorded phone calls examined by the CFTC demonstrate that Barclays traders talked about their plans to manipulate ISDAfix to benefit their other derivatives trades.

The SSEK Partners Group
Our securities law firm represents investors that have sustained financial losses because of securities fraud or other negligence by members of the financial industry. We are dedicated to helping investors recoup their money. Over the years, we have helped thousands of clients. Contact The SSEK Partners Group today.

Deutsche Bank Says Co-CEO Jain Didn’t Mislead Central Bankers, Bloomberg, June 26, 2015

German regulator says Deutsche Bank CEO misled Bundesbank -FT, CNBC/Reuters, June 26, 2015

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 Deutsche Bank Settles Silver Rigging Allegations for $38M

Deutsche Bank (DB) has agreed to pay $38M to settle a securities lawsuit alleging that it colluded with other banks to manipulate silver prices. According to Reuters, this agreement could compel other banks that have been accused of the same misconduct to settle. According to the complaint, investors are accusing the German lender, Bank of Nova Scotia (BNS), and HSBC Holdings (HSBC) of fixing silver prices. They purportedly did this during a secret meeting conducted daily known as the Silver Fix. The silver manipulation scam allegedly began in 2009 and the alleged colluders suppressed prices on about $30B of silver financial instruments and silver that were traded annually.  As a result of the alleged silver manipulation scam, banks were purportedly able to make returns that could exceed 100 percent annualized. Investors claim that UBS AG (UBS) exploited the silver rigging. However, U.S. District Judge Valerie Caproni dismissed the Swiss lender from the case. She said that even if UBS profited from the silver manipulation there was no evidence provided to show that the Swiss bank had rigged prices. In her decision, Judge Caproni said that investors would be allowed to pursue manipulation and antitrust claims against HSBC Holdings and Scotia Bank, including allegations of bid-rigging, use of manipulative device claims, unjust enrichment, price fixing, price manipulation, unlawful restraint, principal-agent claims, and aiding and abetting. It was last year that US authorities began investigating certain banks, including Barclays (BARC), HSBC, Scotia Bank, Credit Suisse Group (CS), Goldman Sachs Group Inc. (GS), Deutsche Bank,  JPMorgan Chase & Co. (JPM), UBS, Standard Bank Group Ltd. (SBK), and Société Générale SA to determine whether they were involved in manipulating precious metal benchmarks. Yahoo and The Wall Street Journal reported that last year that the Commodities and Futures Trading Commission and the US Department of Justice conducted at least 10 probes over the possible manipulation of silver, gold, palladium, and platinum benchmarks. These benchmarks affect the prices of expensive jewelry and financial products. In May 2015, the UK’s Financial Conduct Authority fined Barclays £26m for failings that allowed a trader to try to rig the gold fix. Our securities law firm works with high net individual investors and institutional investors. Contact the SSEK Partners Group today. Deutsche Bank to Pay $38M in US Silver Price Fixing Case, Reuters, October 18, 2016  

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