The U.S. Court of Appeals for the Second Circuit affirmed Wednesday that its 2011 decision in Fait v. Regions Financial dooms a major securities class action against Deutsche Bank AG and several underwriters. The case was brought on behalf of investors who purchased about $5.5 billion in preferred Deutsche Bank shares in 2007, and who alleged that the defendants misled them about the bank’s exposure to toxic mortgage-backed securities and other risks.
Monday’s ruling is a win for Cahill Gordon & Reindel, which represents Deutsche Bank, and for lawyers at Skadden, Arps, Slate, Meagher & Flom who represent a half-dozen big underwriting banks. The decision comes as the U.S. Supreme Court prepares to consider next term whether the Sixth Circuit erred in splitting from the Second Circuit’s Fait ruling in an unrelated case against Omnicare Inc.
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