Cahill Guides Deutsche Bank to Shareholder Deal
After staving off class certification last fall, Deutsche Bank AG has settled a putative investor class action over its pre-financial crisis disclosures. It remains to be seen whether plaintiffs counsel at Robbins Geller Rudman & Dowd were able to wrest any substantial concessions from the bank.
In a Jan. 2 letter to U.S. District Judge Katherine Forrest in Manhattan, Deutsche Bank's lawyers at Cahill Gordon & Reindel wrote that they client reached a "settlement in principle" to resolve claims that it misled shareholders about the riskiness of mortgage-backed securities. "We anticipate that the settlement will be finalized in the next 30 days, if not sooner, at which point the parties will file a Stipulation of Voluntary Dismissal with Prejudice," Cahill partner David Januszewski wrote.
Robbins Geller brought suit in June 2011 on behalf of representative plaintiff IBEW Local 90 Pension Fund. The firm alleged a fraudulent scheme to misled investors, relying on the findings of a report by the U.S. Senate's Levin-Coburn subcommittee. Forrest named Robbins Geller lead plaintiffs counsel in December 2011, denying a rival bid by Kessler Topaz Meltzer & Check.
The case survived a motion to dismiss in March 2013, but went off the rails six months later during the class cert stage. In order to certify the class, Forrest first needed to find that shareholders relied on Deutsche Bank's alleged misrepresentations. That's typically an easy hurdle for plaintiffs lawyers to meet, since it's presumed that investors in an efficient market rely on all available information in choosing to purchase shares. But Forrest refused to let Robbins Geller invoke the so-called fraud-on-the-market presumption, finding that its class cert bid had been tainted by an unqualified expert witness, as we reported here.
Cahill's Januszewski did not immediately return a call seeking comment. We also didn't immediately hear back from plaintiffs counsel John Grant of Robbins Geller.