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Univ. of Toledo College of Law

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Thursday, March 14, 2013

Massachusetts Fines Deutsche Bank Securities $17.5 Million for Conflicts in Marketing CDOs

The Commonwealth of Massachusetts fined Deutsche Bank Securities $17.5 million for conflicts in marketing collateralized debt obligations (CDOs) in a matter settled by a consent order.  According to the allegations, DBSI, which underwrote approximately $32.2 billion of CDOs between 2004-08, failed to disclose conflicts of interest arising from its various roles in proposing the structure for, co-investing in, and serving as the structurer for, a $1.56 billion hybrid CDO.  Specifically, DBSI did not disclose that a proprietary trading group within the firm partnered with a hedge fund to determine how the CDO would be structured and marketed.

http://lawprofessors.typepad.com/securities/2013/03/massachusetts-fines-deutsche-bank-securities-175-million-for-conflicts-in-marketing-cdos.html

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