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Non-Tech : GENI: GenesisIntermedia.com Inc
GENI 2.4300.0%Oct 3 5:00 PM EST

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To: StockDung who wrote (523)6/30/2006 11:48:51 PM
From: PaleskeDrAv   of 574
 
Financial Giant Deutsche Bank has paid up now, denying any responsibility, of course, a gift so to speak.

Dr. Alexander von Paleske

Posted on Thu, Jun. 29, 2006


Bank settles fraud case
Stockwalk award to go to creditors
BY SHERYL JEAN
Pioneer Press

Deutsche Bank has settled a lawsuit filed against it by Stockwalk Group to recover losses incurred as part of a massive securities fraud allegedly orchestrated by the German financial giant, a fugitive Saudi arms dealer and other individuals that bankrupted the Minneapolis-based securities firm.

Terms of the settlement, reached last week, are confidential. Local industry insiders estimated the settlement was for tens of millions of dollars.

"We're pleased with the results," said David Johnson, president of Stockwalk. "This is the end of our litigation with Deutsche Bank."

A spokesman for Deutsche Bank in New York confirmed the settlement but declined to elaborate.

Robert Weinstine, the Minneapolis lawyer representing Stockwalk, has said the company suffered between $75 million and $100 million in damage to its business.

Weinstine on Wednesday said a "substantial portion" of the settlement will be earmarked to repay money the company owes to creditors. In December, Stockwalk still owed about $40 million to creditors.

The amount apparently does not cover full payments to creditors. "In order to pay our creditors in full, Stockwalk anticipates the borrowing of additional funds," according to a letter sent to creditors last week that was obtained by the Pioneer Press.

Stockwalk filed the suit in September 2004 against Deutsche Bank, fugitive Saudi arms merchant Adnan Khashoggi and five other individuals.

Shortly after the Sept. 11, 2001, terrorist attacks, a Stockwalk subsidiary called MJK Clearing became insolvent after losing more than $200 million in a series of risky deals that involved borrowing and lending securities. Regulators took over MJK Clearing and forced it into the largest liquidation of a securities firm in U.S. history.

The suit alleged that the head of Deutsche Bank's stock loan department in Toronto and two acquaintances helped Khashoggi and his associates manipulate shares of a telemarketing company that Stockwalk had borrowed and re-loaned to other securities firms. The scheme fell apart when the telemarketing company's shares lost their value and a New Jersey brokerage that supplied the stock defaulted on a collateral payment to Stockwalk and went out of business.

In December, Deutsche Bank agreed to a $270 million settlement of similar securities-fraud charges brought by a U.S. Bankruptcy Court trustee overseeing the liquidation of MJK Clearing. In that settlement, the bank paid $147.5 million to the estate of MJK Clearing and will settle with three securities firms that have roughly $120 million in claims against the estate. Stockwalk received $10 million from that settlement and the rest went to the Securities Investor Protection Corp. and creditors.

Stockwalk and the trustee for MJK Clearing still have claims pending against a number of individuals and companies named in their suits, according to the lawyers for both parties.

Today, Stockwalk, which reorganized as Miller Johnson Steichen Kinnard under its 2002 bankruptcy, has 190 employees and more than $2 billion in managed assets.
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