Deutsche Bank Ordered to Pay $980,000 in Swap Suit
By Karin Matussek
October 27 (Bloomberg)
Deutsche Bank AG, Germany’s biggest bank, was ordered by an appeals court to pay 710,000 euros ($980,000) in damages over swaps it sold to municipalities.
The Stuttgart Higher Regional Court issued the ruling in a suit brought by a sewer-system operator jointly owned by southern German cities including Ravensburg and Weingarten. The decision overturned most of a lower court ruling that had rejected the claim the bank didn’t properly explain the risk of the swaps, Deutsche Bank attorney Christian Duve said in an interview today.
Deutsche Bank has been involved in more than 20 lawsuits filed by local governments, community-owned utilities and companies that claim the lender sold swaps without adequately disclosing their risks. Four other appeals courts had ruled in favor of Deutsche Bank. Germany’s top civil court will eventually have to decide whether the bank failed to adequately advise its customers.
“The ruling confirms our view that such highly complex financial products require a high quality of advice from the bank,” Peter Gundermann, the attorney for the plaintiff, said in an e-mailed statement.
Deutsche Bank, based in Frankfurt, will ask Germany’s top civil court to overturn the ruling, Duve said. The Stuttgart court said the parties are allowed to appeal today’s order.
UniCredit SpA must return 651,632 euros plus interest to the Italian city of Rimini after a court ruled a swap contract
between them was void.
The contract was ruled invalid because it wasn’t signed at UniCredit’s offices, the city said Oct. 25. The municipality, which had swaps on about 20 million euros of debt, couldn’t be classified as a professional investor, a requirement for agreeing to such transactions away from the lender’s premises, according to the statement.
The German case is OLG Stuttgart, 9 U 148/08..
October 27 (Bloomberg)
Deutsche Bank AG, Germany’s biggest bank, was ordered by an appeals court to pay 710,000 euros ($980,000) in damages over swaps it sold to municipalities.
The Stuttgart Higher Regional Court issued the ruling in a suit brought by a sewer-system operator jointly owned by southern German cities including Ravensburg and Weingarten. The decision overturned most of a lower court ruling that had rejected the claim the bank didn’t properly explain the risk of the swaps, Deutsche Bank attorney Christian Duve said in an interview today.
Deutsche Bank has been involved in more than 20 lawsuits filed by local governments, community-owned utilities and companies that claim the lender sold swaps without adequately disclosing their risks. Four other appeals courts had ruled in favor of Deutsche Bank. Germany’s top civil court will eventually have to decide whether the bank failed to adequately advise its customers.
“The ruling confirms our view that such highly complex financial products require a high quality of advice from the bank,” Peter Gundermann, the attorney for the plaintiff, said in an e-mailed statement.
Deutsche Bank, based in Frankfurt, will ask Germany’s top civil court to overturn the ruling, Duve said. The Stuttgart court said the parties are allowed to appeal today’s order.
UniCredit SpA must return 651,632 euros plus interest to the Italian city of Rimini after a court ruled a swap contract
between them was void.
The contract was ruled invalid because it wasn’t signed at UniCredit’s offices, the city said Oct. 25. The municipality, which had swaps on about 20 million euros of debt, couldn’t be classified as a professional investor, a requirement for agreeing to such transactions away from the lender’s premises, according to the statement.
The German case is OLG Stuttgart, 9 U 148/08..