Why the Deutsche Bank Settlement is Good News for Investors in the GSE Bond Market

On TV, prosecutors promise good deals to perpetrators willing to turn on and co-operate early against their alleged partners in crime. Something similar is playing out in the Southern District of New York in the antitrust class action filed last February against 16 firms who allegedly conspired to manipulate the market for bonds issued by Fannie Mae and other government sponsored enterprises (GSE).

This settlement comes as a reminder to stay on top of these multi-party antitrust cases because a significant amount of settlement monies are and will continue to become available for distribution to eligible investors.

  • On September 11, 2019, the plaintiffs settled (subject to court approval) with Deutsche Bank for $15 million. The Bank is the first to settle in this bond price-fixing suit and did not admit wrongdoing in agreeing to the settlement.
  • While modest in absolute dollars and as percentage of harm, counsel has ball-parked the payout at 13% to 17% of damages attainable from the Bank.
  • The settlement terms include a requirement that the Bank cooperates with the plaintiffs’ investigation and prosecution of the class claims against others. In cases alleging conspiracy, access to ‘insider’ documents and personnel can be critical in pleading claims sufficient to withstand motion to dismiss attacks from defendants, and later in the planning and prosecution of claims that go the distance.
  • Settlement benefits include replenishing lead counsel’s war chest by the attorney fees and expense reimbursement awards; and such partial settlements have a tendency to ‘break the ice’ and encourage others to come to the table.

Hopefully, all this portends a speedier than normal resolution of this matter and more money for harmed investors.

For more information on this case, please contact your FRT representative or email us at learnmore@frtservices.com.

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Founded in 2008, Financial Recovery Technologies (FRT) is the leading technology-based services firm that helps the investment community identify eligibility, file claims and collect funds made available in securities and other class action settlements. Offering the most comprehensive range of claim filing and monitoring services available, we provide best-in-class eligibility analysis, disbursement auditing and client reporting, and deliver the highest level of accuracy, accountability and transparency available. For more information, go to www.frtservices.com.

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