Coughlin Stoia Geller Rudman & Robbins, a US-based law firm, has filed a class action suite in the US District Court for the Southern District of New York on behalf of persons who acquired preferred securities pursuant or traceable to a materially false and misleading registration statement filed with the SEC on October 10, 2006 by Deutsche Bank.
These preferred securities include the 6.37% noncumulative trust preferred securities of Deutsche Bank Capital Funding Trust VIII; the 6.55% trust preferred securities of Deutsche Bank Contingent Capital Trust II; the 6.625% noncumulative trust preferred securities of Deutsche Bank Capital Funding Trust IX; the 7.35% noncumulative trust preferred securities of Deutsche Bank Capital Funding Trust X; the 7.60% trust preferred securities of Deutsche Bank Contingent Capital Trust III; and the 8.05% trust preferred securities of Deutsche Bank Contingent Capital Trust V offered in October 2006, May 2007, July 2007, November 2007, February 2008 and May 2008, respectively.
The complaint charges Deutsche Bank, certain of its subsidiaries, its senior insiders, the investment banks that underwrote the offerings and Deutsche Bank’s auditors with violations of the Securities Act of 1933.
The complaint alleges that from October of 2006 through May of 2008, Deutsche Bank consummated the offerings pursuant to the false and misleading registration statement, selling over 248m shares of the securities at $25 per share for proceeds of more than $6.2 billion.
According to the complaint, the true facts which were omitted from the registration statement were: the company failed to properly record provisions for credit losses, residential mortgage-backed securities, commercial real estate loans, and exposure to monoline insurers; its 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; 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 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 E10 billion by selling equity in the company to the German government.
The plaintiff seeks to recover damages on behalf of all persons who acquired the securities pursuant or traceable to the registration statement issued in connection with the offerings. The plaintiff is represented by Coughlin Stoia.
