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Searching for an Efficient Market with Cross -Listed Securities: Denial of Class Certification in Deutsche Bank Illustrates Increased Scrutiny of the Fraud on the Market Doctrine

December 16, 2013

By HOWARD M. PRIVETTE, BARRY SHER, & CHRIS MCGRATH

Recently, the Southern District of New York denied class certification in a securities fraud action brought against Deutsche Bank AG in IBEW Local 90 Pension Fund v. Deutsche Bank AG (“Deutsche Bank”).1 Significantly, the court found that the shareholder plaintiffs failed to meet their burden of establishing market efficiency for the securities in question, and thus were not entitled to the presumption of reliance permitted under the so-called “fraud on the market” doctrine. In the wake of the U.S. Supreme Court’s March 2013 decision in Amgen Inc. v. Connecticut Retirement Plans and Trust Funds (“Amgen”),2 the Deutsche Bank order provides an insightful roadmap for defendants looking to challenge class certification in putative securities fraud class actions, particularly where the securities in question are cross-listed on multiple exchanges.