Deutsche Bank, Anschutz End Auction-Rate Securities Suit

Deutsche Bank AG settled claims brought by Anschutz Corp. alleging the bank manipulated the market for auction-rate securities.

U.S. District Judge Susan Illston in San Francisco dismissed the claims against Deutsche Bank as well as those against Fitch Inc. and Fitch Ratings Ltd., as the companies requested. Terms of the settlement weren’t disclosed in the court order posted today on its online docket.

Banks running periodic auctions abandoned the $330 billion market for the securities in 2008 amid the fallout from the subprime market slump. Investors were stuck with the products. Denver-based Anschutz claimed it bought $59 million of the securities in 2006 and 2007, thinking they were safe and liquid, and was unable to sell them.

Illston last year denied a request to dismiss the claims against Frankfurt-based Deutsche Bank’s Deutsche Bank Securities unit and Standard & Poor’s, another defendant.

Anschutz, controlled by Colorado billionaire Philip F. Anschutz, said in a 2009 lawsuit that Deutsche Bank and Bank of America Corp.’s Merrill Lynch, the claims against which were sent to New York, deceived investors about the risks of the securities and that the ratings services erroneously promoted the products as safe by giving them high credit ratings.

Jim Monaghan, a spokesman for Anschutz, declined to comment on the settlement and said the claims against Standard & Poor’s are still pending. Sigalit Grego, a spokeswoman for Deutsche Bank, declined to comment, and Sandro Scenga, a spokesman for Fitch Ratings, had no immediate comment.

The case is Anschutz v. Merrill Lynch, 09-3780, U.S. District Court, Northern District of California (San Francisco.)

Before it's here, it's on the Bloomberg Terminal. LEARN MORE