U.S. judge denies class action status in Deutsche Bank lawsuit
By Nate Raymond
NEW YORK (Reuters) - A U.S. judge on Tuesday refused to allow shareholders to proceed as a group in a lawsuit accusing Deutsche Bank AG (DBKGn.DE: Quote) of misrepresenting the risks of mortgage-related investments that were central to the financial crisis.
The ruling by U.S. District Judge Katherine Forrest in New York effectively ends the class action against the German bank, although shareholders could proceed individually.
Forrest ruled that an expert hired by the shareholders to give an opinion on whether the market for Deutsche Bank shares was efficient was unqualified and used a flawed methodology.
"For this court to rely on testimony from someone who lacks real expertise asks this Court to dispense with the need for real qualifications," Forrest wrote.
Renee Calabro, a spokeswoman for Deutsche Bank, said it was "pleased with the court's decision." John Grant, a lawyer for the plaintiffs at Robbins Geller Rudman & Dowd, did not responded immediately to requests for comment.
Filed in 2011, the lawsuit accused Deutsche Bank of issuing false and misleading statements about its health in the run up to and during the global financial crisis.
The lawsuit said Deutsche Bank packaged and sold mortgage-backed securities and collateralized debt obligations that it knew were riskier than it told the market.
The lawsuit also accused Deutsche Bank of misrepresenting its risk management practices and said it was too slow to write down impaired mortgage securities. Continued...