SEC Form 20-F - Deutsche Bank Annual Report 2012

Deutsche Bank
Annual Report 2010 on Form 20-F
Item 8: Financial Information 119
allocations of IPO shares to required aftermarket purchases by customers and to the payment of undisclosed
compensation to the underwriters in the form of commissions on securities trades, and that the underwriters
caused misleading analyst reports to be issued. In the securities cases, the motions to dismiss the complaints
of DBSI and others were denied on February 13, 2003. Plaintiffs’ motion to certify six “test” cases as class
actions in the securities cases was granted on October 13, 2004. On December 5, 2006, the U.S. Court of
Appeals for the Second Circuit vacated the decision and held that the classes in the six cases, as defined,
could not be certified. On March 26, 2008, the trial court granted in part and denied in part motions to dismiss
plaintiffs’ amended complaints. The extent to which the court granted the motions did not affect any cases in
which DBSI is a defendant. Following mediation, a settlement was reached and approved by the trial court on
October 6, 2009. On October 23, 2009, an objector filed a Rule 23(f) petition with the Second Circuit, seeking
leave to appeal the trial court’s certification of the settlement class in connection with all 310 cases, including
the cases in which DBSI was named as a defendant. The plaintiffs objected, and all the underwriter defendants
responded, to the petition on November 2, 2009. The petition was subsequently withdrawn and substituted with
an appeal of the district court’s order. That appeal is currently pending before the Second Circuit.
Parmalat litigation. Following the bankruptcy of the Italian company Parmalat, the prosecutors in Milan conducted
a criminal investigation which led to criminal indictments on charges of alleged market manipulation against various
banks, including Deutsche Bank and Deutsche Bank S.p.A. and some of their employees. Trial before the Court
of Milan (Second Criminal Section) commenced in January 2008 and is ongoing. The first instance judgment is
expected to be handed down during April or May 2011. Prosecutors in Parma have conducted a criminal investigation
against various bank employees, including employees of Deutsche Bank, on charges of fraudulent bankruptcy.
The trial commenced in September 2009 and is ongoing. One former Deutsche Bank employee entered
into a plea bargain in respect of the charges against him in Milan and Parma (most of which related to the period
prior to his employment with the Bank) which have accordingly been withdrawn.
Certain retail bondholders and shareholders have alleged civil liability against Deutsche Bank in connection
with the above-mentioned criminal proceedings. Deutsche Bank has made a formal settlement offer to those
retail investors who have asserted claims against Deutsche Bank. This offer has been accepted by some of the
retail investors.
During January 2011, a group of institutional investors (bondholders and shareholders) commenced a civil claim
for damages, in an aggregate amount of approximately € 130 million plus interest and costs, in the Milan courts
against various international and Italian banks, including Deutsche Bank and Deutsche Bank S.p.A., on allegations
of cooperation with Parmalat in the fraudulent placement of securities and of deepening the insolvency of
Parmalat. A first hearing is expected to be scheduled for September or October 2011.
Sebastian Holdings. Deutsche Bank AG is in litigation in the United Kingdom and the United States with
Sebastian Holdings Inc., a Turks and Caicos company (“SHI”). The dispute arose in October 2008 when SHI
accumulated trading losses and subsequently failed to meet margin calls issued by Deutsche Bank AG.
The U.K. action is brought by Deutsche Bank AG to recover approximately U.S.$ 246 million owed by SHI after
the termination of two sets of master trading agreements with SHI. In the U.K. action against SHI, the trial court
held that it has jurisdiction over Deutsche Bank AG’s suit and rejected SHI’s claim that the U.K. is an inconvenient
forum for the case to be heard. SHI appealed those determinations, but its appeals on both determinations
were rejected by the Court of Appeal in August 2010. SHI applied to the Supreme Court for leave to appeal the
Court of Appeal’s ruling, but the Supreme Court refused SHI’s application.