Deutsche Bank faces amended complaint in spoofing lawsuit
Deutsche Bank is facing an amended complaint in a spoofing lawsuit filed against it in the Illinois Northern District Court.
The plaintiffs include Rock Capital Markets, LLC, Charles Herbert Proctor, III, Robert Charles Class A, L.P., David Vecchione, Todd Rowan, and Atlantic Trading USA, LLC. They have brought this class action for damages against Defendants Deutsche Bank AG (DBAG) and Deutsche Bank Securities Inc. (DBSI).
According to the second amended complaint, submitted on August 23, 2023, the action arises from Deutsche Bank’s unlawful and intentional manipulation of U.S. Treasury Futures contracts and Options on Treasury Futures contracts and Eurodollar Futures contracts and Options on Eurodollar Futures contracts that trade on United States-based exchanges, including the Chicago Mercantile Exchange (CME) and the Chicago Board of Trade (CBOT) during the period beginning at least as early as January 1, 2013 and ending no earlier than July 31, 2017 (the “Class Period”) in violation of the Commodity Exchange Act, 7 U.S.C. §§ 1, et seq. (the “CEA”), and the common law.
The complaint further alleges that the defendants manipulated the prices of Treasury and Eurodollar Futures by employing a classic manipulative device known as “spoofing,” whereby the defendants, at the time they placed orders for Treasury or Eurodollar Futures, intended to cancel those orders prior to execution in order to send false and illegitimate supply and demand signals to the market. As a result, Defendants allegedly caused Treasury and Eurodollar Futures prices to be artificial throughout the Class Period in order to financially benefit from their trading positions at the expense of investors, such as Plaintiffs and members of the Class.
Further, the complaint alleges that throughout the Class Period, Deutsche Bank systemically failed to supervise its traders, which allowed them to promote and maintain a continuous culture of manipulation, which pervaded several offices during the Class Period and resulted in hundreds of internal compliance alerts and thousands of examples of successful manipulation. As a result, Defendants continuously spoofed during the Class Period and successfully manipulated Treasury and Eurodollar Futures prices to artificial levels throughout the Class Period.
The unlawful conduct and manipulation alleged in the complaint was first disclosed in a Commodity Futures Trading Commission (CFTC) Order released on June 18, 2020, in which DBSI agreed to cease and desist from spoofing and pay a $1.25 million civil penalty to the CFTC.
Plaintiffs’ allegations and claims are made on information and belief (except as to allegations specifically pertaining to Plaintiffs, which are made on personal knowledge) based on the investigation conducted by and under the supervision of Plaintiffs’ counsel.
That investigation included reviewing and analyzing information concerning the Treasury and Eurodollar market, which Plaintiffs (through their counsel) obtained from, among other sources: (1) reports about theTreasury market and Eurodollar market; (2) publicly available press releases, news articles, and other media reports related to investigations into manipulation of Treasury and Eurodollar Futures, among others; (3) documents concerning Defendants’ business practices made available through private civil litigation as well as formal investigations and enforcement proceedings, including by the CFTC; (4) pre-existing, non-privileged documents Defendants furnished to the CFTC; (5) the full record of Defendants’ orders, trades, and cancelations in CBOT Treasury and CME Eurodollar Futures during 2013; (6) the full record of Plaintiffs’ transactions in CBOT Treasury and CME Eurodollar Futures during 2013; and (7) other public reports about Defendants.
The full scope and specific details of Defendants’ manipulation cannot be known to Plaintiffs at this time. More evidence supporting the allegations in this Complaint is set to be uncovered after a reasonable opportunity for discovery.
The plaintiffs seek, inter alia, a judgment awarding Plaintiffs and the Class actual damages for Defendants’ CEA violations, together with pre- and post-judgment interest at the maximum rate allowable by law.