Mass. Fines Deutsche Bank $17.5M Over Failed CDO

Law360, New York (March 13, 2013, 5:42 PM EDT) -- Massachusetts securities regulators on Wednesday fined a Deutsche Bank AG unit $17.5 million for allegedly concealing a hedge fund's bet against a $10 billion collateralized debt obligation the German bank helped create and sell, causing investors to lose hundreds of millions of dollars.

In a consent decree signed Wednesday, the Massachusetts Securities Division alleged that Deutsche Bank Securities Inc. helped create the $1.56 billion Carina CDO Ltd. in 2006 with Illinois-based Magnetar Capital LLC. The hedge fund then saw profits on its bets against the CDO...
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