Cambridge-based CDN Akamai Technologies has filed a federal lawsuit in a continuing attempt to recover some $217 million it said Deutsche Bank "wrongfully invested" in risky auction-rate securities that lost their value as the market crashed two years ago. Akamai contends the bank misled it about the volatility of the market and was in violation of the company's conservative investing policy.
The German bank has bought back $1 billion in the bonds from small investors and paid a $15 million fine after striking a deal in August of 2008 with regulators, but hasn't worked out a deal with many institutional investors who lost huge amounts of money.
"Deutsche Bank knew, but did not disclose to Akamai, that (auction-rate securities) had a significant but undisclosed risk of liquidity and should not have been considered short-term investments," states the lawsuit filed in U.S. District Court in Boston. A company statement also said the bank has been unresponsive to its demands for satisfaction. "They have steadfastly refused to provide us with any liquidity solutions, despite being required to use best efforts to do so in settlement agreements reached with the SEC (Securities and Exchange Commission) and state attorneys general."
- see this Boston Herald article