Thursday, March 14, 2013
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.