A class action lawsuit was filed on behalf of persons who acquired the 6.375% Noncumulative Trust Preferred Securities of Deutsche Bank Capital Funding Trust VIII ("6.375% Securities") (NYSE:DUA) and/or the 7.35% Noncumulative Trust Preferred Securities of Deutsche Bank Capital Funding Trust X ("7.35% Securities") (NYSE:DCE) (collectively, the "Securities") pursuant or traceable to materially false and misleading registration statements and prospectuses (collectively, the "Registration Statements") issued in connection with the October 2006 and November 2007 offerings, respectively, of the Securities (the "Offerings").
The complaint alleges that Deutsche Bank AG, certain of its subsidiaries, its senior insiders and the investment banks that underwrote the Offerings with violations of the Securities Act of 1933.
The complaint further alleges that in October of 2006, Deutsche Bank 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, Deutsche Bank 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, Deutsche Bank issued a press release announcing disappointing fourth quarter 2008 financial results, including a loss after taxes of (EURO)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 (EURO)10 billion by selling equity in the Company to the German government.
Plaintiff seeks to recover damages on behalf of all persons who acquired the Securities pursuant or traceable to the Registration Statements issued in connection with the Offerings (the "Class").
All persons who acquired the 6.375% Noncumulative Trust Preferred Securities of Deutsche Bank Capital Funding Trust VIII ("6.375% Securities") (NYSE:DUA) and/or the 7.35% Noncumulative Trust Preferred Securities of Deutsche Bank Capital Funding Trust X ("7.35% Securities")
