Deutsche Bank fails to secure dismissal of lawsuit brought by former trader
Deutsche Bank has failed to secure dismissal of a lawsuit brought by former trader Matthew Connolly.
On October 31, 2023, Judge Jesse M. Furman of the New York Southern District Court issued a memorandum and opinion denying Deutsche Bank’s motion to dismiss.
Matthew Connolly, a former employee of Deutsche Bank AG, was arrested and prosecuted for illegal manipulation of the London Interbank Offered Rate, more commonly known as LIBOR, a prominent benchmark interest rate.
In 2019, a jury convicted Connolly of conspiracy to commit wire and bank fraud and substantive wire fraud, but the Second Circuit reversed the convictions on sufficiency-of-the-evidence grounds in January 2022.
Thereafter, Connolly brought a lawsuit against Deutsche Bank alleging malicious prosecution.
In brief, he alleges that the Government effectively outsourced its investigation to Deutsche Bank — an allegation with which Connolly’s criminal trial judge agreed and that Deutsche Bank, in an effort to avoid prosecution and insulate top executives, served Connolly up as a scapegoat by making intentionally false or misleading representations (or omissions) at his expense.
Deutsche Bank has moved, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, to dismiss.
Upon review of the parties’ motion papers, the Judge nixed Deutsche Bank’s motion.
For starters, the Judge found that there is no merit to Deutsche Bank’s contention that Connolly’s Complaint is subject to the heightened pleading requirements.
Further, Deutsche Bank’s arguments are premised on factual disputes that cannot be resolved at this stage of the litigation. That is, assuming the truth of Connolly’s allegations and drawing all reasonable inferences in his favor, as the Court must, he alleges a plausible claim of malicious prosecution against Deutsche Bank.
Deutsche Bank’s motion was denied. Deutsche Bank must file its answer to the plaintiff’s complaint within two weeks of the date of the Memorandum Opinion and Order.