20090420 Deutsche Bank, Insider Trading Watermark)

Deutsche Bank AGThe Insider Trading Policy

To: Josef AckermannFrom: Deepak Moorjani

DEUTSCHE BANK AG April 20, 2009

就労請求 Satyagraha

Personal and Confidential

Josef AckermannDeutsche Bank AGTheodor-Heuss-Allee 70Frankfurt 60262Germany

Herr Josef:

I hope this note finds you well.

One of our colleagues (Employee X) recently admitted to at least one count of conspiracy to commit securities fraud. On multiple occasions, Employee X admits that our internal policy stipulates the violation of criminal laws; our business unit (Commercial Real Estate) will only conduct proprietary trades of publicly-traded equity securities with the possession of material, non-public information. These are not allegations by me, but public admissions by him.

This confession was initially made in a signed affidavit dated March 16, 2009. In his capacity as the CRE business unit’s official representative to the court, Employee X states that insider trading is the internal policy for proprietary trading, and investment proposals which do not include material, non-public information are considered incomplete. On April 17, 2009, Employee X reaffirmed this conspiracy in his testimony, under penalty of perjury. This indicates premeditated behavior, not an accidental oversight.

This may seem like a mistake or a careless error on two separate occasions, but Employee X’s signed affidavit was likely co-written and revised by a number of internal legal staff in New York, Sydney and Tokyo. It was also likely co-written and revised by compliance personnel in Singapore and Tokyo. This signed affidavit would have been reviewed and translated from American into Japanese by the two external law firms hired to implement the cover-up.



While this testimony was made in Tokyo District Court, Employee X is an American who is employed by DBSI:

Deutsche Bank Securities Inc., a subsidiary of Deutsche Bank AG, conducts investment banking and securities activities in the United States.

DSBI is "a U.S. SEC-registered broker dealer and a member of, and regulated by, the New York Stock Exchange." DBSI is also a primary dealer of the Federal Reserve Bank of New York.

Further, Employee X testified that this was not a one-time subversion of criminal laws and explicitly implicated his colleagues in the New York office. He stated that the insider trading policy was developed and used by his colleagues in the New York office, the headquarters of the mortgage-securitization business. At a minimum, this would specifically implicate Jon Vaccaro and Justin Kennedy.

As insiders, our firm typically prefers competing with an informational advantage, and this abuse of power seems to be permitted behavior in the securitization market. This policy of acting mala fide has been explicitly stated for several years:

“We need to secure capital market opportunities where we can take advantage of knowledge on properties we underwrite at the time of financing.”

You must already be aware of the signed affidavit and the court testimony, given management’s explicit threats and its initiation of multiple lawsuits against an employee in order to suppress disclosure.

Nonetheless, this formal report to you is required by my fiduciary duty to the firm. Insider trading in the US and in Japan is theoretically punishable by criminal law, if and when enforced.



Mysteriously, this prohibition seems infrequently enforced against cartel members. When it is enforced - as the May 28, 2008 episode reveals - the penalty is de minimis relative to the expected profits of several million dollars. The fine is simply a cost of doing business, a speeding ticket for the crime of armed robbery. This enables cartel members to act with impunity.

As management has demonstrated, cover-ups are quite easy to implement for the primary dealer community, especially with former regulators on the payroll. Still, the present-day automatic amnesty provided to cartel members may not always be the unofficial policy of the establishment.

Please be aware of the risks of this behavior, as you may be seen as aiding and abetting this willful misconduct. While internal behavior is often an expression of the desire to have rights without duties, outsiders may begin to reevaluate the unchecked monopoly of management.

With best regards,

Deepak

Photos courtesy of flickr users: dustpuppy, Alki1 and World Economic Forum



The Insider Trading Admission

The game is rigged. Employee X, in a signed affidavit, details the elaborate internal process for making an investment in publicly-traded equity securities. The CRE internal policy requires material, non-public information to be considered complete. Management’s previous attempts to cover-up have re-characterized the investment proposals as (i) generic market analysis and (ii) advisory assignments rather than proprietary trades.



Implementing the Cover-up

Regulatory capture is fairly inexpensive. Richard Walker formerly served as enforcement director for the S.E.C., where he was also the agency's general counsel and headed its New York regional office. ''Dick Walker probably knows more than anyone about U.S. securities law and regulations,'' said Mr. von Heydebreck, Deutsche Bank's board member for legal compliance said in a statement in 2001. ''This knowledge and understanding will be invaluable as Deutsche Bank seeks to complete its U.S. listing and establish itself as a permanent fixture with U.S. investors.''



Letter to Michael Cohrs

For the firm, the primary issue is the loan book, given the lack of profitability on a total return basis. Of course, it is difficult to describe these problems in a letter, given the highly-political environment. The regulatory issues deserved immediate institutional attention, given the upcoming investigation. While our internal policy stipulates the violation of criminal laws, this does not expose the firm to terminal risk. Our balance sheet does.



The Chinese Wall

Capitalizing on insider information. According to internal documents, the business of loan origination in Commercial Real Estate is an insider role. The sale of the resulting mortgage securities is considered a public function. The explicitly stated goal of the Commercial Real Estate business: "We need to secure capital market opportunities where we can take advantage of knowledge on properties we underwrite at the time of financing."



A Speeding Ticket For Armed Robbery

Non-enforcement seems to be the unofficial policy. The press releases reports describe the insider trading violation in the capital markets division without actually using the term. The depositor bank pays the fine of ~$30,000 while no individual is penalized. The penalty seems low, given the expected profits; this is analogous to issuing a speeding ticket for the crime of armed robbery. The reports also fail to mention the names of the guilty in the capital markets division, managed by Henry Ritchotte, an expat American.



Suppressing Free Speech

A warning letter from internal lawyers. Using the explicit threat of litigation, management is seeking to suppress free speech. This is also an example of a willful intent to deceive the public.



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Greenspan Goes To Germany

The steward of low interest rates joins the firm. Deutsche Bank has secured exclusive access to the “Oracle” for investment banking advice. Greenspan has an exclusive arrangement with another German firm, Allianz SE, for asset management advice.



The Revolving Door: An Example

Order Approving an Application to Become a Bank Holding Company. Deutsche Bank AG (“Deutsche Bank”), a foreign banking organization subject to the Bank Holding Company Act (“BHC Act”), has requested the Board’s approval under section 3 of the BHC Act (12 U.S.C. § 1842) to become a bank holding company by acquiring all the voting shares of Bankers Trust Corporation, New York, New York (“BT Corp”). Voting for this action: Chairman Greenspan, Vice Chair Rivlin, and Governors Kelley, Meyer, Ferguson, and Gramlich.



FEDERAL RESERVE SYSTEM

Deutsche Bank AGFrankfurt am Main, Germany

Order Approving an Application to Become a Bank Holding Company andNotices to Acquire Nonbanking Companies

Deutsche Bank AG (“Deutsche Bank”), a foreign banking

organization subject to the Bank Holding Company Act (“BHC Act”), has

requested the Board’s approval under section 3 of the BHC Act (12 U.S.C.

§ 1842) to become a bank holding company by acquiring all the voting

shares of Bankers Trust Corporation, New York, New York (“BT Corp”),

and its wholly owned subsidiary banks, Bankers Trust Company, New York,

New York (“Bankers Trust”); Bankers Trust (Delaware), Wilmington,

Delaware (“Delaware Bank”); and Bankers Trust Florida, N.A., Palm Beach,

Florida (“Florida Bank”).1 Deutsche Bank also has requested the Board’s

approval under section 4(c)(8) of the BHC Act (12 U.S.C. § 1843(c)(8)) and

section 225.24 of the Board’s Regulation Y (12 C.F.R. 225.24) to acquire

the nonbanking subsidiaries of BT Corp and thereby engage worldwide in

certain permissible nonbanking activities.2 In addition, Deutsche Bank

1 Deutsche Bank proposes to acquire BT Corp by merging an indirect,wholly owned acquisition subsidiary with and into BT Corp, with BT Corpas the surviving company. Deutsche Bank also proposes to hold BT Corpthrough an intermediate holding company in the United States. Because thisintermediate company would indirectly control a U.S. bank, it would be abank holding company for purposes of the BHC Act.2 The nonbanking activities in which BT Corp engages and for whichDeutsche Bank has sought Board approval under section 4 of the BHC Actare listed in the Appendix.

To: Herr Josef From: Deepak April 20, 2009

- 30 -

modification or termination of the activities of a bank holding company or

any of its subsidiaries as the Board finds necessary to ensure compliance

with, and to prevent evasion of, the provisions of the BHC Act and the

Board’s regulations and orders issued thereunder. These commitments and

conditions are deemed to be conditions imposed in writing by the Board in

connection with its findings and decision, and, as such, may be enforced in

proceedings under applicable law. Underwriting and dealing in any manner

other than as approved in this order and the Section 20 Orders (as modified

by the Modification Orders) is not within the scope of the Board’s approval

and is not authorized for Deutsche Bank.

The acquisition of BT Corp’s subsidiary banks may not be

consummated before the fifteenth calendar day after the effective date of this

order, and the proposal may not be consummated later than three months

after the effective date of this order, unless such period is extended

for good cause by the Board or by the Reserve Bank, acting pursuant to

delegated authority.

By order of the Board of Governors,48 effective May 20, 1999.

____________________________Robert deV. Frierson

Associate Secretary of the Board

48 Voting for this action: Chairman Greenspan, Vice Chair Rivlin, andGovernors Kelley, Meyer, Ferguson, and Gramlich.


4/28/09 Primary Dealer List - Open Market Operations - News and Events - Federal Reserve Bank of New York

1/1www.ny.frb.org/newsevents/news/markets/2002/an020401.html

FOLLOW US:

NEWS AND EVENTS

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View News andEvents Contacts

April 1, 2002

Primary Dealer ListBelow is a revised list of the primary dealers that report weekly to the Securities Reports Division ofthe Federal Reserve Bank of New York.

The latest list reflects the following change(s):

! Effective March 30, 2002, Deutsche Banc Alex. Brown Inc. changed its name to Deutsche BankSecurities Inc.

! Effective March 31, 2002, Zions First National Bank has withdrawn its name from the list of primarydealers.

! Effective April 1, 2002, Fuji Securities Inc. changed its name to Mizuho Securities USA Inc.

! Effective April 1, 2002, BMO Nesbitt Burns Corp. has withdrawn its name from the list of primarydealers.

List of the Primary Government Securities Dealers Reporting to the Securities Reports Divisionof the Federal Reserve Bank of New York

ABN AMRO IncorporatedBNP Paribas Securities Corp.Banc of America Securities LLCBanc One Capital Markets, Inc.Barclays Capital Inc.Bear, Stearns & Co., Inc.CIBC World Markets Corp.Credit Suisse First Boston CorporationDaiwa Securities America Inc.Deutsche Bank Securities Inc.Dresdner Kleinwort Wasserstein Securities LLC.Goldman, Sachs & Co.Greenwich Capital Markets, Inc.HSBC Securities (USA) Inc.J. P. Morgan Securities, Inc. Lehman Brothers Inc.Merrill Lynch Government Securities Inc. Mizuho Securities USA Inc.Morgan Stanley & Co. IncorporatedNomura Securities International, Inc.Salomon Smith Barney Inc.UBS Warburg LLC.

NOTE: This list has been compiled and made available for statistical purposes only and has no significance with respect to other

relationships between dealers and the Federal Reserve Bank of New York. Qualification for the reporting list is based on theachievement and maintenance of the standards outlined in the Federal Reserve Bank of New York's memorandum of January22, 1992.

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12/12/11 Deutsche Bank MBS traders mispricing leads to $30 million loss.

1/8www.freerepublic.com/focus/news/797057/posts

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Deutsche Bank MBS traders mispricing leads to $30 million loss.Bloomberg | 11/26/02 | Stephen Cohen

Posted on Thu Nov 28 2002 01:16:56 GMT+0530 (IST) by greencow

Deutsche Puts Two Mortgage-backed Trades on Leave

New York, Nov. 26 (Bloomberg)-- Deutsche Bank AG placed two traders on administrative leave as itinvestigates mispricing of some of the firm's secondary trading positions of commercial mortgage-backedsecurities.

Deutsche Bank placed Jake Markman and Paul Mashikian on administrative leave while the firm conductsthe investigation, according to spokesmen Ted Meyer.

The mispricing may result in more than $30 millions in losses, according to the report in Bond Week, whichcited an individual with knowledge of the situation. The publication earlier reported that the two traderswere placed on leave.

Meyer said that the bank doesn't "comment on market speculation as to whether there were losses." He alsosaid, "Any impact on our book would not have a material impact on our earnings." Meyer said no clientslost money as a result of the trading.

Markman and Mashikian couldn't be reached for comment.

TOPICS: Business/Economy; Front Page NewsKEYWORDS: cmbs; deustchebank; mispricing

It should be noted that both of these characters report directly to Justin Kennedy, the son of Supreme CourtJustice Anthony Kennedy. How is it possible on a trading desk as small as Deutsche Bank's that JustinKennedy didn't know in advance that there was a problem? They sit next to each other on the trading deskand talk continuosuly, so it is unlikely that the manager would be completely taken by surprise (unless, ofcourse, he wasn't doing his job by failing to supervise). Mashikian is a trader with a reputation for beinghonest and Markman is a trading assistant, not someone who could misprice the books by over $30 million.A thorough investigation should be performed and the people responsible (including the supervisor) shouldbe held accountable.

For a point of reference, Justin Kennedy was hired by Kevin Ingram, the Deutsche Bank mortgage grouphead that is serving time in Federal prison for allegedly laundering money for Pakistani terrorists during2001 (but before September 11th). Ingram brought Jesse Jackson into Deutsche Bank when Ingram wasfired - allegedly, Ingram received a $10 million settlement.

1 posted on Thu Nov 28 2002 01:16:56 GMT+0530 (IST) by greencow[ Post Reply | Private Reply | View Replies]


12/12/11 Deutsche Bank MBS traders mispricing leads to $30 million loss.

2/8www.freerepublic.com/focus/news/797057/posts

To: greencow

I once had a Deutsche Bank trader butt in front of me at the Philadelphia train station. I know this becausewhen I pointed out politely there was a line, he said that he was a trader for Deutsche Bank, that he made$700,000 a year, that he had *two* cellphones, etc. This seemed to be his argument for why he should notgo to the end of the line. !

Needless to say a tortured him verbally. I kinda hope it's one of these guys that got fired.

2 posted on Thu Nov 28 2002 01:26:48 GMT+0530 (IST) by FreeTheHostages[ Post Reply | Private Reply | To 1 | View Replies]

To: FreeTheHostages

My reply to this wide butt would be to shove BOTH cell phones into his gluteus maximus. Can't imaginethe sight when both cells started to ring simulaneously!

3 posted on Thu Nov 28 2002 02:11:22 GMT+0530 (IST) by HadEnough[ Post Reply | Private Reply | To 2 | View Replies]

To: greencow

When I worked for an IT firm in NYC I was placed at the Deutsche Bank trading floor (it was just a row ofcomputers) at their offices on 6th Ave. I did zippo work as they were trying to complete a merger between"Deutsche Bank" and "West Deutschelands Bank" or something like that. If this was the same area that these two people worked in I can't see how you could keep a secret. Placewas wide open, you could hear everything, and no more than 100 people could work there at one time.

4 posted on Thu Nov 28 2002 02:25:50 GMT+0530 (IST) by lelio[ Post Reply | Private Reply | To 1 | View Replies]

To: FreeTheHostages

I agree that traders can be unbearable. !

There is something wrong with this story. Either it was a failure in hedging that resulted in $30 million inlosses or it was intentional inflating of the marks. But if it was a hedging mistake, why did Deutsche Banksqueal on these folks to BondWeek and then have an anonymous internal source say that the mispricing isover $30 million? Doesn't make sense. Apparently, it was overmarking positions for which there werelosses.!

As the original poster said, how could the person in charge of that area NOT know that the books wereinflated? Clearly, the person in charge (apparently Justin Kennedy) should have known about this (or hewas not providing any oversight which is just as bad). !

5 posted on Thu Nov 28 2002 02:25:52 GMT+0530 (IST) by TonyS6[ Post Reply | Private Reply | To 2 | View Replies]

To: greencow; mhking

"Hold muh margin calls and WATCH THIS!"

6 posted on Thu Nov 28 2002 02:26:49 GMT+0530 (IST) by Poohbah




Idea OverviewA Novel Way to Acquire Real Estate Assets in the Japan Market

JREIT Private Market Value Arbitrage

Japan’s JREIT MarketJapan’s Investment Trust Law, enacted

in November 2000, established the

REIT vehicle, and two JREITs were

listed in September 2001. As of No-

vember 2005, listed JREITs total 28,

including 13 newly-listed JREITs since

the beginning of the year. JREIT ex-

pansion has been aided by the JGB

yield gap coupled with the liquidity,

current income yield and transpar-

ency of the investment vehicle.

In Japan, we expect to see a con-

tinuation of growth in the REIT sec-

tor given the secular shift from pri-

vate to public ownership of real es-

tate. However, the large and growing

number of funds in Japan is not

sustainable without some consolida-

tion. As companies compete for

deals, asset prices continue to rise

and cap rates continue to fall thereby

making it more difficult to generate

the returns demanded by public

shareholders. The pressure to reach

critical mass will increase: with size

comes the ability to cover wider

territory, to save on expenses, to

lower the cost of capital, and to in-

crease liquidity. Couple this with the

changing of the guard at many pri-

vate empires, and consolidation is

likely to occur.

Naysayers might argue that manage-

ment entrenchment, tax concerns,

poison pills, and a variety of other

factors will prevent consolidation.

These issues do exist and are real

barriers. In addition, JREITs are not

cheap enough in the aggregate for

the LBO/M&A business to grow

dramatically at current valuations.

However, we believe the structure of

the JREIT group and the timing of

the property and market cycles will

put enough pressure on the industry

to consolidate (and decapitalize)

over the next several years; consoli-

dation forces will overcome these

impediments.

Market ComparisonMore and more Japanese investors

find the appeal of JREITs attractive.

Creatures of tax law, JREITs provide

transparency, liquidity, more perma-

nent management and corporate

structures, easier access to all forms

of capital including unsecured debt,

and greater overall property market

efficiency.

Consolidation in the JREIT sector

seems more than likely when valua-

tions fall. As a comparison, the over-

all market capitalization of US REITs

grew from $44.3 billion to $224.2

billion during 1994 through 2003, but

the number of REITs declined from a

peak of 225 to less than 175. Austra-

lia provides another data point. In

Australia, there are 80 listed LPTs

DEEPAK MOORJANI! MARCH 2006

PROPRIETARY AND CONFIDENTIAL!

SUMMARY

1.1JREIT CONSOLIDATIONConsolidation in the JREIT sector

seems inevitable. The timing of

the property and market cycles

will put enough pressure on the

industry to consolidate

1.2RESIDENTIAL SECTORA handful of residential JREITs

already trade at a discount to

NAV. Fears of asset oversupply do

exist, liquidity is limited, and mar-

ket capitalizations are too small

to attract the larger domestic

pension funds

1.3INVESTMENT STRATEGYAn aggressive financial sponsor

can acquire enough shares in the

public market to block the man-

agement contract renewal. Spon-

sor should convince asset manag-

ers to initiate a value-creating

transaction, possibly an MBO

1.4LEGAL LOOPHOLE JREITs are not covered by Japa-

nese TOB procedures. Thus, the

usual prohibitions and restrictions

on acquiring large blocks of stock

do not apply


and other property firms with a total

market cap of over $50 billion, and

LPTs control nearly half of the insti-

tutional quality commercial real es-

tate in Australia. However, the sector

is dominated by five LPTs which ac-

count for 40 percent of the sector's

market capitalization. The top 10

LPTs make up more than 65 percent

of the sector.

In the US, NAV premiums hit peak

highs in 1997-1998 at nearly 25-30%

premiums to NAV. These numbers

declined in the REIT bear market of

1999-2000 when REIT stocks signifi-

cantly underperformed the overall

market. In early 2000, REITs valua-

tions hit bottom and were trading at

more than a 10% discount to NAV. In

this environment, a number of large

LBO/MBO transactions were con-

summated in the REIT sector in-

cluding Berkshire Realty, Sunstone,

Irvine, Walden Residential and Pa-

triot American. More recently, Capi-

tal Automotive, Gables Residential,

CRT Properties and AMLI approved

plans to go private at 9-21% premi-

ums over market prices in 2005.

Investment StrategyIn a sense, this is a low-risk contrar-

ian bet on the Japanese residential

market. For certain reasons, some of

the residential JREITs trade at or a

small discount to NAV despite the

fact that TOPIX is at 5-year highs.

For 0.9-1.0BV, a public market inves-

tor can generate approximately 3-4%

on a current yield basis. For a finan-

cial sponsor, there are a number of

ways to work with a JREIT asset

manager to create a value-creating

transaction, including a management-

led buyout. An MBO is simply taking

advantage of private market/public

market arbitrage when stock and/or

sector valuations decline, and the

financial sponsor IRRs are driven by

leverage.

Note that the commercial JREIT

sector has been studied and ex-

cluded at current prices; these stocks

typically trade at a 40-50% premium

to published NAV.

Most investors have ignored this

potential transaction in Japan. The

local market has not seen a LBO/

MBO in the JREIT sector. In fact, this

might be why the FSA regulations

are silent on a JREIT TOB; the possi-

bility was probably not considered

when JREITs were created.

Step 1:

Begin to accumulate shares in the

public market for select residential

JREITs. Approval by 50% of share-

holders is enough for the JREIT CEO

to reject the automatic renewal of

the existing management agreement.

The asset manager also has complete

discretion, subject to its fiduciary

duty to shareholders, to dispose of

any or all of the JREIT assets. A ma-

terial change in asset manager fees

will require an amendment to the

JREIT articles of incorporation which

requires approval by 66.6% of share-

holders.

The risk for this public market pur-

chase is fairly low. Of course, a dis-

count to NAV is not always a strong

buy signal; the valuation gap can be

closed by an increasing cap rate

which means that real estate values

fall. However, it is hard to imagine

that cap rates will increase in the

short-term. JREITs are priced by

public market investors on current

yield, and while the average yield has

declined from approximately 7% to

3.5% since the market’s inception,

the overall JREIT yield spread over

the local government bond remains

larger than anywhere else in the

world. Regional banks, life insurers

and corporate pension funds are

expected to increase their alterna-

tive asset allocations.

Also, residential real estate in Japan is

fundamentally mispriced. In most

markets, residential real estate trades

at lower cap rate than commercial

real estate, but the opposite is true

in Japan. Traditionally, lower residen-

tial cap rates are justified by more

stable rental revenue rates and a

lower risk of rental fluctuation. In

Japan, higher residential cap rates

indicate a fear of falling rental rates

due to expected property oversup-

ply and a gradually shrinking popula-

tion. However, these fears are over-

emphasized: Japan will see continued

urbanization, especially in Tokyo, and

the number of households is ex-

pected to increase for the next 10

years with greater numbers of young

people living alone, greater incidence

of divorce, etc.

Step 2:

Begin a conversation with manage-

ment on a friendly basis. Ideally, this

step will lead to an MBO (discussed

in Step 3), but a going private trans-

action is not the only value-

generating outcome. Among other

options, management can consider a

merger with another JREIT. This tax-

efficient share-for-share combination

will lead to critical mass for smaller

JREIT entities, a lower cost of capital,

greater liquidity and perhaps sector

diversification (office, retail, etc.).

With a merger, holders of JREIT

shares can expect a more favorable




stock valuation and a possible change

of control premium.

Weak sponsorship may be another

reason for certain JREIT NAV dis-

counts. If the value-added by the

management team is less than the

cost of maintaining the team, then

management can be viewed as an off-

balance-sheet liability. Many closed-

end mutual funds, real estate compa-

nies, and oil companies often sell at

prices below what is justified by the

assets. In these situations, a change of

management often seem to be the

solution.

Corporate governance issues need

to be seriously considered, and any

corporate transaction (MBO, merger,

leveraged recapitalization, etc) might

provide the opportunity to improve

the management team. Corporate

governance is discussed more closely

in Appendix B

Step 3:

For a financial sponsor, the best pos-

sible outcome is to convince the

JREIT manager to execute an MBO.

A private market buyer must ac-

count for a number of items in a

potential transaction: potentially

higher cap rate assumptions, debt

prepayment penalties and origination

costs, and transaction fees. Together,

these items could amount to 5% of

NAV and must be included in any

analysis of private market value. Like

most discounts, the buy-side will

probably be ahead of the sell-side

and BODs on this issue.

Appendix A details the financial

analysis, and it is important to re-

member that a private market value

(“PMV”)/LBO valuation may not

equal net asset value. As a simplifying

assumption, we have assumed that a

discount to NAV is necessary for an

attractive transaction; however, this is

a limiting and potentially misleading

assumption that is discussed in Ap-

pendix A.

Even with transaction costs and an

assumed higher cap rate (a discount

to NAV), a JREIT MBO makes finan-

cial sense. As an example, an MBO

with a 100 bps cap rate premium

produces IRRs of 29.4%, an equity

return multiple of 2.74x, and cash-

on-cash yields of 21.8%. A similar

JREIT structure produces IRRs of

7.6%, an equity return multiple of

1.4x, and cash-on-cash yields of 5.1%.

In a going-private transaction, there

are three sources of value:

!Financial arbitrage: The trust struc-

ture limits leverage to 30-40% of

total assets. JREIT investors want

high-current income, and JREITs

typically limit leverage in order to

maintain high-dividend payments.

An MBO with 75-90% leverage is a

significant financial restructuring

with an investor base that does not

need or want the current income

stream.

!Wholesale-to-retail mispricing:

Public market valuations are not

the same as private market valua-

tions, and NAV is often dated and/

or inaccurate. Public NAV is stale

and inherent value depends on the

private buyer’s view on expected

future prices.

!Management arbitrage: This de-

pends on the identity of the man-

agement team which can be im-

proved with an outside sponsor.

Also, a private company structure

can enable the execution of a dif-

ferent business plan/strategy that

might not be available in the public

market.

Our analysis only considers financial

arbitrage and does not consider any

management arbitrage, potentially

significant depending on the identity

of the partner. We have assumed that

unlevered cash flow grows at a mod-

est 3% per year.

ConclusionWe have identified some of the likely

candidates who have been selected

based on relatively weak sponsor-

ship, market pricing and size. As a

private buyer, the financial restruc-

turing of an MBO creates value, and

it is a very efficient way to acquire a

large portfolio of assets. It need not

be the final step: the exit might be a

new JREIT offering depending on

public market conditions and amount

of value creation during the portfo-

lio’s period of private ownership.




Richard H. Walker Elected to MBIA's Board of Directors

ARMONK, N.Y.--(BUSINESS WIRE)--Sept. 14, 2006--MBIA Inc. (NYSE: MBI) announced today that Richard H. Walker was elected to MBIA's Board of Directors. Mr. Walker is the general counsel of Deutsche Bank, where he oversees the Legal and Compliance departments worldwide.

Before joining Deutsche Bank in 2001, Mr. Walker was director of the Division of Enforcement for the Securities and Exchange Commission (SEC). Preceding his appointment to that position, he served as general counsel and northeast regional director since joining the SEC in 1991. Prior to the SEC, Mr. Walker spent 15 years in the New York office of Cadwalader, Wickersham & Taft, where he was a litigation partner specializing in corporate, securities and commercial litigation.

MBIA Board Member and Nominating/Corporate Governance Committee Chair Claire Gaudiani said, "Richard's impressive legal, compliance and financial expertise will add important depth to our Board. We are delighted to have him join us, and are confident that the experience he's gained throughout his remarkable career will provide an invaluable asset as we guide MBIA's continued growth in the global financial guarantee marketplace."

While at the SEC, Mr. Walker was awarded the Presidential Rank Distinguished Service Award in 1997--the highest federal award for government service. He also received the SEC's Distinguished Service Award, and the Chairman's Award for Excellence.

Mr. Walker is a member of the New York Stock Exchange Legal Advisory Committee, and is a trustee of the Securities and Exchange Commission Historical Society and the American Folk Art Museum. A Phi Beta Kappa graduate of Trinity College, Mr. Walker received his J.D. degree, cum laude, from Temple Law School.

MBIA Inc., through its subsidiaries, is a leading financial guarantor and provider of specialized financial services. MBIA's innovative and cost-effective products and services meet the credit enhancement, financial and investment needs of its public and private sector clients, domestically and internationally. MBIA Inc.'s principal operating subsidiary, MBIA Insurance Corporation, has a financial strength rating of Triple-A from Moody's Investors Service, Standard & Poor's Ratings Services, Fitch Ratings, and Rating and Investment Information, Inc. Please visit MBIA's Web site at www.mbia.com.

CONTACT: MBIA Inc.Liz James, 914-765 3889

SOURCE: MBIA Inc.







1

TO: TEAM CONTRARI

FROM: DEEPAK MOORJANI / DON TANG

SUBJECT: CONTRARI / PRIORI $14-28MM EQUITY INVESTMENT

DATE: NOVEMBER 10, 2006 / DECEMBER 18, 2006

OVERVIEW

This memo reviews a proposed real estate principal investment in the Japanese market. Expandinginto the principal business in Japan has strong synergy with the existing lending and investmentbanking platform, and this opportunity presents a “safe and cheap” way to initiate this principalplatform. Japan is unique in that there are real barriers to entry, and with a positive cost of carry, it isa market where downside risk is relatively limited. Our rationale for the investment is furtherexplained in this memo.

Safe and cheap: This meets our primary criteria as a “safe and cheap” investment. We propose toinvest approximately $14 million to purchase a 5% stake in a publicly-traded JREIT code-namedPriori. This is secured real estate risk that CRE understands and takes in the core lending business(side note: a 90% LTV loan qualifies as “equity-risk” even though it may be booked internally asdebt). In this vein, we have analyzed value using three methods: (i) NAV (ii) Implied cap rates and(iii) PMV. [Please see Appendix for further elaboration on value].

The initial strategic minority investment will be marked-to-market on a daily basis which should notbe cause for consternation. Rather than focus on weekly stock price movements, we approach this asa long-term, value-oriented equity investment. This is not a trade, but a strategic investment wherewe are paid to take risk and will generate complementary investment and commercial bankingrevenues. As DB Research reports (11/06), “While REITs do show some systematic developmentsin their price performance, these are in some cases not very pronounced. Consequently, tradingstrategies do not excel . . . All in all, active trading opportunities are probably limited. . . . Goingprivate will remain the regulating force for the REIT market.”

As structured, this investment provides

Current Yield + Capital Gain Potential + Fee Potential

(i) Minority stake: On a 12-month basis, our 5% investment ($13.7mm) stake is expected to generate$400k in revenue with a NIM of 280bps. We also seek to increase this holding to 10% which will besubject to market conditions (explained later). If we increase the stake to 10%, our cost will be$27.4mm with revenue of $800k with a NIM of 280bps. (ii) If the company does convert, we canexpect to see another 10-15% in capital appreciation. (iii) Fee potential on the resource conversationshould be $10 million assuming a 2% total transaction fee (M&A advisory, structuring, etc). Thisdoes not include any ECM/DCM fees upon exit.


2

Sourcing and relationship: As an equity investment, our investment in Priori is sourced in thesecondary market which provides access to mispriced / undervalued assets while avoiding thesourcing issue, a typically high-barrier in the Japanese market. In the secondary market, we cancompensate for the lack of a dedicated sourcing team and ineffectual working relationships withinternal groups which have the necessary sourcing capabilities (RREEF, DPG, and REIB).Additionally, this investment allows DB to build relationships with sponsors as an investment partner(as opposed to a service provider) and to generate potential fee income upon a financial restructuring.As a minority investor, DB gains an aligned interest with the asset management company whichshould be interested in repurchasing core assets while earning opportunity fund returns.

One important point to remember: some of the smaller platforms have been ignored by investorsdue to the lack of a brand-name sponsor. In this market, the “name-brand” of the sponsor hasheightened value. Morgan Stanley is the sponsor of the asset management companies of NipponResidential (8962), Creed Office (8983), and BLife Investment (8984). These investments were madeby Morgan Stanley Properties with the goal of building relationships and sharing information. CreditSuisse recently purchased a significant minority interest in the asset management company of UnitedUrban (8960), and Lehman Brothers is a sponsor for Japan Single Residence (8970).

Consolidation play: This market will consolidate. The market is not large enough to support 40independent companies; operators will increasingly need critical mass as many aspects of the businessrequire scale. Already, the market capitalizations of the three largest JREITs (NBF, JRE, JRF)account for 34% of the total market equity capitalization. The average market capitalization isapproximately ¥100 billion while Priori’s market capitalization is ¥31.7 billion.

As companies compete for deals, asset prices will continue to rise (cap rates will continue to fall),thereby making it more difficult to generate the returns demanded by public shareholders. In the pastfew years, the yield gap has shrunk from 400-500bps to 200 bps. While spreads remain the widest inthe world, larger JREITs are already beginning to think about using M&A as organic growthbecomes more difficult. This does not mean that the market will shrink; as the U.S. and in Australianmarkets have shown, the markets have grown and bifurcated. In recent months, MSREF, JP Morgan,New City Residential, Prospect and APL have started to think about this issue. In September 2006,Prospect Asset Management stated, “Where else in Japan can we find assets as cheaply as we canindirectly through the J-Reit market?”

With this expected consolidation, we focus primarily on the private market value (PMV) of thesecorporate entities / asset portfolios. This is slightly more technical than the “high-yield” strategyemployed by typical JREIT investors, including Japanese banks and financial institutions. In this case,IRR is the superior valuation methodology. As long as debt is cheaper than equity, we can trade onthe equity. Note: Counsel at Skadden has advised that there is not a regulatory cap on leverage forthe trusts; the majority of JREITs have self-imposed an internal cap of 60% LTV leverage. Our viewis that public market investors will not appreciate the increased financial risk. Investors purchasethese shares for the spread over the JGB; these investors want safe dividends. This increase inleverage is best done as a private company with shareholders who understand the risks of leverage.

The potential for M&A among the JREITs is under active discussion, especially in the residentialsector. While a hostile takeover may be technical feasible given the possible jurisdictional issue(creeping tender), the more viable route is to pursue a friendly takeover. Here are three scenarios:


3

(i) A share-for-share swap between two JREITs. The acquisition of one JREIT of another JREITmerger does not require a TOB in the same manner as the acquisition of one KK of another KK.

(ii) A real estate fund purchases shares in the open market or pursues an MBO transaction withexisting management.

(iii) A JREIT or real estate fund acquires the assets of another JREIT.

In cases (ii) and (iii), the essential element is control of the JREIT asset management company; thesecompanies require a license from the Financial Services Authority in order to operate. All JREITasset managers must be authorized under Article 6 of the Investment Trust Law which means thatanyone who purchases shares cannot actually control the JREIT; a large shareholder interested incontrol would also need to obtain Article 6 authorization. A large shareholder can overturn the assetmanager agreement, but these are generally 2-year agreements which require a 2/3 majority. Ourconclusion is that hostile takeovers are difficult but possible over a long period of time. The moreviable route is to pursue a friendly takeover in conjunction with the owners of the asset manager.

With the number of JREITs that have recently listed, consolidation seems inevitable. “It will onlytake one deal to start the M&A bandwagon rolling and there is both a need and a genuineexpectation that this will happen,” stated Alex Kinmont, Priori Asset Management (September 2006).To date, we have seen two M&A transactions in the JREIT market.

(i) United Urban Investment Corp (UUR). Listed in Dec 2003, UUR is a mid-sized JREIT withnearly 170 billion in diversified assets comprised of office, retail, hotel, residential and other assets.Formed by Trinity Investments, the firm sold the JREIT’s asset manager (Japan Reit Advisors Co) inMay 2006 to Marubeni (51%), Credit Suisse (44%) and Kyokuto Securities (5%). Approximately 80%of the original JREIT assets came from Trinity which was Trinity’s exit from the hard asset portfolio.The sale of the interest in the asset manager provided the final exit for Trinity from the investment.

(ii) DaVinci Advisors acquired 20% of the outstanding shares of Japan Single-Residence AssetManagement (JSAM), the management company of Japan Single Residence (JSR). DaVincicomments that it will now enter the residential REIT market by supporting the expansion of JSR’sreal estate.

This regulatory environment on this sector is mixed, and it is not clear that the FSA and SESC havethe usual regulatory oversight. Technically, these are trusts, and some legal experts believe that ahostile approach is uniquely possible in this market (without hitting the usual take-over limitations).

Share acquisition strategy: We have consulted with internal compliance as well as external counselat Skadden. Our 5% open-market purchase will not require DB to seek any special regulatoryapprovals and will not inhibit our ability to seek advisory and financing revenues. For sharepurchases, we will be using the Structured Equity Transaction Group (SETG) in Global Marketswhich understands the market and the issues involved. This group has been and currently is theprime broker in Japan for MSREF and its share acquisition program, including MSREF’s purchasesof Sapporo shares.

Priori’s stock is not actively traded (the top 10 shareholders control 48% of the TSO), a pure open-market share acquisition program could take 50-60 days. As such, STB will consider off-marketpurchases. In the Japan market, we run the risk of a compulsory TOB (Take-Over Bid = tenderoffer) for 100% of the TSO with a 5% shareholding if we enter into transactions with more than 10


4

sellers in a 60-day period. A TOB is not our preferred approach and not recommended. Hostile,whether direct or indirect, is also to be avoided. Lehman Brothers had initially been advisor andfinancier to Livedoor’s hostile bid for NBS. Lehman dropped its advisory role due to reputation riskconcerns; however, Lehman still suffered severe reputation risk even with a reduced role. If DBseeks to finance another group’s unfriendly approach, DB will likely face unwanted reputationaldamage.

Hedging public market risk: There is no publicly traded JREIT option market, and as such, theonly way to hedge a public market position in JREIT shares is OTC. Japan CRE has considered thepurchase of put options to hedge this investment position, and we have had initial conversations withSETG. Forward pricing will be closely related to the dividend yield of the securities, and as such, theoption pricing will cost significantly more than the dividend yield for DB after accounting for timevalue and cost of the gamma hedge. Hence, CRE Japan is convinced that hedging via options wouldnot be a cost-effective strategy. Hedging against an index might be possible, but the historicalcorrelations seem quite weak. DB Research reports that “over the short term, REITs correlate withequities very noticeably in some cases, especially with shares of small and medium-sizedcompanies . . . however, this correlation is neither robust nor stable over time. In any event, it is notpossible to derive a concrete trading strategy from it . . . No long-term cointegration has been foundbetween a general equity market index and REITs”

Why We Like Residential: Japan’s residential market is similar to Germany, and given the recentinvestor interest in the office market, this is a very contrarian bet in the Japanese real estate market.In Greater Tokyo, there are effectively 2.5mm units of residential housing, of which 2.0mm areprivately owned. Of the 2.0mm, about 70% are non-wooden units available for investment byresidential JREITs. Today, only 47% of the market is owner-occupied, and only 15% of the rentalmarket is owned by corporations. In theory, a company with a large balance sheet can be moreeffective in professionally maintaining, repairing and upgrading the housing stock. In July 2005,Priori went public with 30 properties and an asset base of ¥45.4 billion. Today, the company owns 42properties with an asset base of ¥59 billion. Management has indicated a desire to increase its assetbase to ¥100 billion by the January 2008 term.

Recent market activity: Last week, the JREIT market rally continued with 22 of 40 JREITs hittingtheir all-time highs. Office JREITs are leading the market on the expectation of strong demand forspace and rising rents. The TSE REIT index hit an all-time high of 1965.66 last week. In the overallmarket, daily trading volume is starting to rise, and the current 30-day moving average stands at JPY11.0 billion, an increase over the average JPY 6.7 billion in 2005. Priori also had an interesting week:it hit a 6-month high of ¥438,000/share on Wednesday (52-week range: ¥348,000-¥464,000 with anIPO price of ¥480,000). Volume was particularly high on two days: on Wednesday, volume was morethan 4.1x its average volume, and on Thursday, volume was 3.3x its average volume. Priori’s shareprice rose 5% during the week. To: Herr Josef

From: Deepak April 20, 2009




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Daiki Kajino/db/dbaom

2007/05/09 19:19

To

cc

Tomohiko Kimura/Tokyo / DBJ apan/ D euBa@DBAPACe

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Subject Fw: Staff - Privileged & Confidential

Kimura-san

As we discussed in this morning, t exptained the current situation to Murakami-san in HR'

Afterthat, I arranged "onfãtén"-ä

cali with Srnil N¿ã¿"" and it is alreadv fixed on tomorrow at 17:00 (Tokvo

I tme/.Mffif,am¡-san and I will have a oonference call with him and ask him about our ooncerns.

If you need to join it, please let me know.

As to investigation of Frank's e-mail for Pipeline issue, I will start it as soon as I obtain Mitch's approval'

Regards,

****-***'**'******Daiki Kajino (F¿EÍ X*!)Compliahce DeparlmentDeutsche Bank AG, TokYo BranchTel : +81-3-5156-7738Fax +81-3-51 [email protected]****'***'**'******---- Forwarded by Daiki Kajino/db/dbaom on 2007/05/09 19:13 ----

MarkGrolman/SYdneY/D BAustralia/DeuBa@DBAPAG

2007/05/09 19:09 To

"Díck Walker" (riohard'h.walker@db'oom),ianic [email protected], raohe I'[email protected]'

iË"ãj!r"æ¿u.com, "tiivoshi Murakami"tkil;;h#;rkamiddb.cbm), "Andrew Hume"i"í¿*",.f,rr"@db.com), "Daiki Kajino" (daiki.kajino@db'oom),

''Mr. Tomohiko (Tom) Kimura" (tomohiko'kimura@db'oom)

Ø

Srbj; Staff - Privileged & Confidential

PRIVILEGED & CONFIDENTIAL

Below are draft notes of the interview I had with Frank Forelle yesterday.

NEXT STEPS

I suggest for your condsideration that the next steps should be:

(a) we interview Sunil Madan. Tom Kimura has agreed to do that by telephone as soon as possible this

week;

(b) when Deepak Moorjani returns to Tokyo from the- US next week, we pres.s him aga.in to produce all

evidence he has or rnv åll"Ë"ã violations or wJongaoing. In the two weeks since he was interviewed he has

not produced any evidence;

(c) agree a letter to Mr Moorjani in response to his letter. .l suggest that.this. letter be siened by David

Hatt as presideni "n¿

òËö'oi'ósílti.r" "rõLï"i "i Ni lr¡oorjani). oãvi¿ Hatt has been briefed on this

matter. I will draft ttre r"rJoÃs. letter for yori i"ui"*. Once-agreed, that letter should be delivered to Mr

Moodani.

I also propose gíving the draft notes of meeting to Frank Forelle to check for accuracy'


From: [email protected]: Re:Re: Re:Answer

Date: September 8, 2008 12:41:44 AM JST

To: [email protected], [email protected]

Deepak,

I just received a call from DB's lawyer (Mr. Asai).He says the Company decided to tell you today not to come to work for thetime being.Of course I objected, as I did yesterday, saying that the Client (you) wouldbe offended because it is obvious that the Company doesn't want the Clientaround at the time of FSA inspection.Mr. Asai told me that he had told the Company about my objection yesterday,but he could not persuade the Company not to do this.The salary would be paid as usual.I'm sorry that you are requested such non-attendance, but for now, it wouldbe difficult for us to file a provisional remedy to deny suchnon-attendance, because you are entitled to your salary as before.

I suggested that the period of such non-attendance should be limited untilthe end of settlement negotiation, which means August 27, 2007.He is expected to get back to me as to the period of such non-attendance.

I also asked about the settlement amount, and he told me he is thinking ofequivalent of normal dismissal rather than disciplinary dismissal, which Ithink means one month salary and retirement payment in accordance with thecompany's internal regulations.Mr. Asai also told me that when my Letter was delivered to the Company, hewas actually in the middle of drafting a termination notice to you.

Of course I told him that this is not the matter of non-performance but theClient's right under the whistleblowers protection law, and that Mr. Asaiwas not well informed of the Company's FSA violations.

Anyway, in the worst case scenario, if the settlement is not reached, wemust sue the Company at the point when the Company officially terminatesyou.

I will e-mail you again when I hear from Mr. Asai again.

Best regards,

Maki Miyazaki


4/1/09 Deutsche Bank Hires Greenspan for Securities Unit (Update3) - Bloomberg

1/2www.bloomberg.com/apps/news?pid=21070001&sid=aPyyhqM5FLgA

Deutsche Bank Hires Greenspan for Securities Unit(Update3)By Elena Logutenkova - Aug 13, 2007

Aug. 13 (Bloomberg) -- Deutsche Bank AG, Germany's biggest bank, said it hired former Federal

Reserve Chairman Alan Greenspan as a consultant for its securities unit.

Greenspan, 81, will provide ``advice and insight'' to the company's corporate and investment banking

unit and its clients, the Frankfurt-based bank said today. Its securities unit is Europe's largest by

revenue.

Greenspan, who retired from the Fed in January 2006 after 18 years as chairman, is already advising

Allianz SE's Pacific Investment Management Co., owner of the world's biggest bond fund. Deutsche

Bank also counts former U.S. Treasury Secretary John Snow and former Senator George Mitchell

among its advisers as it tries to narrow the gap with competitors in the U.S.

``Dr. Greenspan's position as one of the architects of the modern financial system gives him a unique

perspective from which to help our clients make critical risk-management decisions,'' Chief Executive

Officer Josef Ackermann said in a statement.

The former chairman, who guided the U.S. economy through its longest expansion, has been giving

paid lectures and is also writing a book, ``The Age of Turbulence: Adventures in a New World,'' due

to be released on Sept. 17 by Penguin Press.

Deutsche Bank is the second-biggest trader on the Wall Street behind Goldman Sachs Group Inc. The

bank is ninth in global merger advice this year, with Goldman and Citigroup Inc. ranked as the top

two advisers.

The bank's second-quarter profit rose 31 percent, beating analysts' estimates as revenue from trading

surged, boosted by ``favorable market-positioning'' in credit trading as U.S. housing suffered the

worst slump in 16 years.

Deutsche Bank shares rose 1.53 euros, or 1.6 percent, to 96.72 euros at 12:45 p.m. in Frankfurt, valuing

the company at 51 billion euros ($70 billion). The stock has gained 13 percent over the past year.


4/1/09 Deutsche Bank Hires Greenspan for Securities Unit (Update3) - Bloomberg

2/2www.bloomberg.com/apps/news?pid=21070001&sid=aPyyhqM5FLgA

To contact the reporter on this story: Elena Logutenkova in Frankfurt at [email protected]

To contact the editor responsible for this story: Adrian Cox at [email protected]

©2010 BLOOMBERG L.P. ALL RIGHTS RESERVED.




D E B A G

LET’S BUILD A STRONGER FIRM

•

全国一般労働組合東京南部東京都港区東京港区新橋５!１７!７

03.3434.0669 | www.nugw.orgMembership is open to DB employees, former DB employees and

general members of the Japan community.

OUR GOALS FOR 2008

•Collectively bargain for higher wages

•Improve working conditions

•End temporary employee status

•Promote corporate governance

•Lobby for compliance with

Japanese laws and regulations*

全国一般労働組合東京南部

* We intend to focus on Chinese Wall Violations, Firewall Violations, and Anti-Money Laundering Violations

deb

ag


DEUTSCHEBANKGENERALUNIONOFWORKERS


http://www.nugw.org

http://www.nugw.org

D E B A G

信頼出来る会社を造ろう

•

全国一般労働組合東京南部東京都港区東京港区新橋５!１７!７

03.3434.0669 | www.nugw.orgMembership is open to DB employees, former DB employees and

general members of the Japan community.

2008 年の私達の目的

•高賃金獲得の為に団結しよう•労働条件を改善しよう

•正式雇用契約を勝ち取ろう•企業統治改革を実現しよう

•日本の法律を遵守しよう*


* We intend to focus on Chinese Wall Violations, Firewall Violations, and Anti-Money Laundering Violations

deb

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DEUTSCHEBANKGENERALUNIONOFWORKERS


http://www.nugw.org

http://www.nugw.org

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5/11/09 5:59 PMTSE : TSE imposes penalty on Deutsche Securities Inc.

Page 1 of 2http://www.tse.or.jp/english/news/200805/080528_a.html

HOME News

TSE News

TSE imposes penalty on Deutsche Securities Inc.

May 28 , 2008 update

[Tokyo Stock Exchange, Inc.]

The TSE imposed a fine of JPY 3 million on Deutsche Securities Inc. ("Deutsche

Securities") for the act of trading securities through a proprietary account based on

corporate related information. The TSE also requested Deutsche Securities to submit

a business improvement report that states that the company will (i) in light of the

cause of the violation, implement a plan to establish the necessary internal

management system suitable for preventing unfair trading based on corporate

related information ;（ii）implement training for all executives and staff so they

accurately understand and fully comply with the laws and internal procedures for

handling corporate related information; and(iii)clarify the locus of responsibility.

Nature of Violation

The TSE has deemed that Deutsche Securities traded securities through a

proprietary account based on corporate related information.

On October 18, 2006, a Relationship Manager in the Origination Department at

Deutsche Securities Inc. ("DSI"), with respect to MSCBs scheduled to be issued by

Company 'A' and subscribed to by an affiliate company of DSI, acquired undisclosed

information that Company 'A' intended to cancel the issuance (hereinafter, the

"Company Related Information") over the course of performing his duties, but failed

to properly handle the Corporate Related Information, such as internally registering

it as Company Related Information. On October 19, 2006, as the MSCB issuance was

not made as originally planned, a DSI trader belonging to DSI's equity trade division

wanted to tentatively unwind a short position in Company 'A' shares he had created

for the purpose of hedging the affiliate company's subscription of the MSCBs, and

consulted with a compliance officer in charge of the equity trade division on whether

a buy-back of Company 'A' shares could be executed. Because he did not fully

understand the laws and regulations relating to Company Related Information, the

compliance officer approved the buy-back. As a result, DSI bought back Company 'A'

shares on the Tokyo Stock Exchange 1st section and other markets based on the

discretionary trading agreement between it and the affiliate company, prior to

Company 'A' disclosing this Company Related Information to the public on October

19, 2006.

The above act is acknowledged to be an 'act of trading securities through a

proprietary account based on corporate related information.' as defined in Item 10,

Paragraph 4 of the ex-Ordinance of the Cabinet Office Concerning the Regulations,

etc. of Conducts of Securities Companies based on Item 10, Paragraph 1 Article 42

of the ex-Securities and Exchange Law.


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5/11/09 5:59 PMTSE : TSE imposes penalty on Deutsche Securities Inc.

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Contact

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Tel. +81-3-3666-0141

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Sanno Park Tower2-11-1 Nagata-cho, Chiyoda-kuTokyo, Japan 100-6171813.5156.6002

Tokyo Summary Court Consolidates Deutsche Bank Litigation

Tokyo, Japan (July 11, 2008) – Today, the Tokyo Summary Court ordered the

consolidation of a Deutsche Bank AG lawsuit into an existing lawsuit in Tokyo District Court.

On June 6, 2008, Deutsche Securities Inc., a subsidiary of Deutsche Bank AG, filed a lawsuit against one of its employees in Tokyo Summary Court (Case #13543). David Hatt, CEO of Deutsche Securities Inc., filed to have JPY 912,000 in rental payments (approx. US$8,690) reimbursed to the firm.

Defendant’s counsel successfully motioned to have Deutsche Bank’s claim consolidated into Tokyo District Court. Tokyo Summary Court consolidated the claim despite objections from Deutsche Bank.

In Tokyo District Court, Deutsche Securities Inc. is the defendant in a claim for breach of contract between the parties. The breach of contract claim was filed in February 2008 (Case #4109) by Yasushi Higashizawa of Kasumigaseki Sogo Law Office. In this same period, Deutsche Bank unilaterally stopped making payments under the rental contract.

In Tokyo Summary Court, Deutsche was represented by Shiro Muto of Deutsche Securities Inc., Takashi Asai of Dai-Ichi Fuyo Law Office and Naoko Yatabe of Apple Law Office. The defendant was represented by Yasushi Higashizawa of Kasumigaseki Sogo Law Office.

About Deutsche Bank AGDeutsche Bank is a leading global investment bank with a strong and profitable private clients franchise. A leader in Germany and Europe, the bank is continuously growing in North America, Asia and key emerging markets. With 78,275 employees in 76 countries, Deutsche Bank offers unparalleled financial services throughout the world. The bank competes to be the leading global provider of financial solutions for demanding clients creating exceptional value for its shareholders and people.

Press ContactsDavid HattDeutsche Securities Inc.(813) [email protected]

Michael CohrsDeutsche Bank AG(4420) [email protected]

就労請求

db


mailto:[email protected]





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From: DEEPAK MOORJANI <[email protected]>Date: January 12, 2009 12:21:37 PM GMT+05:30To: Michael Cohrs <[email protected]>, David Hatt <[email protected]>Cc: Colin Grassie <[email protected]>, Anshu Jain <[email protected]>Subject: Deutsche Bank Satyagraha: Tokyo District Court (#4109)

4/1/09 Press Release: Robert Khuzami Named SEC Director of Enforcement; 2009-31; Feb. 19, 2009

1/2www.sec.gov/news/press/2009/2009-31.htm

Home | Previous Page

Robert Khuzami Named SEC Director of Enforcement

FOR IMMEDIATE RELEASE2009-31

Washington, D.C., Feb. 19, 2009 — Securities and Exchange CommissionChairman Mary L. Schapiro announced today that former federal prosecutorRobert Khuzami has been named Director of the Division of Enforcement.

Previously, Mr. Khuzami served as a federal prosecutor for 11 years withthe United States Attorney's Office for the Southern District of New York. AsChief of that Office's Securities and Commodities Fraud Task Force for threeyears, Mr. Khuzami prosecuted numerous complex securities and white-collar criminal matters, including those involving insider trading, Ponzischemes, accounting and financial statement fraud, organized crimeinfiltration of the securities markets, and IPO and investment adviser fraud.Mr. Khuzami most recently served as General Counsel for the Americas atDeutsche Bank AG.

"I'm pleased to have Rob join the SEC in such an important role at thiscrucial time," said Chairman Schapiro. "As we work to improve investorconfidence in the markets, our enforcement efforts are vital. Throughouthis career, Rob has demonstrated an unwavering commitment toprosecuting wrongdoers and protecting citizens. As a former federalprosecutor, Rob is well-suited to lead the SEC's Division of Enforcement aswe continue to crack down on those who would betray the trust ofinvestors."

Mr. Khuzami said, "As head of the SEC's Division of Enforcement, the staffand I will relentlessly pursue and bring to justice those whose misconductinfects our markets, corrodes investor confidence and has caused so muchfinancial suffering. I am honored to join Chairman Schapiro, theCommissioners and the dedicated SEC staff in this critical effort."

Under Mr. Khuzami's supervision, the Task Force brought numerousnoteworthy securities fraud prosecutions. In U.S. v. Lino and related cases,more than 100 defendants were arrested in an undercover sting operation,which constituted the largest simultaneous arrest in a securities fraud casein Department of Justice history. Charges in the cases includedracketeering, securities fraud, a scheme to defraud union pension plans,extortion, and the solicitation of murder. The case concerned the publiclytraded securities of 19 companies and the private placements of 16 othercompanies. Those charged included 11 members and associates of all fiveNew York City crime families.

In another case, U.S. v. Bennett, 11 defendants were convicted of running aPonzi scheme for fraudulently selling more than $1.0 billion worth ofequipment leases and related debt instruments to more than 12,000


4/1/09 Press Release: Robert Khuzami Named SEC Director of Enforcement; 2009-31; Feb. 19, 2009

2/2www.sec.gov/news/press/2009/2009-31.htm

investors. Defendant Patrick Bennett was sentenced to 30 years in prison.

During his tenure with the Task Force, Mr. Khuzami significantly increasedcoordination and joint prosecution of securities fraud cases in the New YorkCity area, including among the New York County District Attorney, the U.S.Attorney's Office for the Eastern District of New York, and the New YorkState Attorney General, as well as the SEC and FINRA.

Mr. Khuzami also prosecuted the "Blind Sheik" Omar Ahmed Ali AbdelRahman in what was then the largest terrorism trial in U.S. history.Following a 10-month trial, 10 defendants were convicted of operating aninternational terrorist organization responsible for, among other things, the1993 bombing of the World Trade Center, the assassination of Meir Kahane(the founder of the Jewish Defense League), and planning the virtuallysimultaneous bombing attacks on the FBI's New York Headquarters, theLincoln and Holland Tunnels and the United Nations Headquarters. Mr.Khuzami also supervised various aspects of the initial investigations in NewYork following the terrorist attacks of Sept. 11, 2001.

Mr. Khuzami has been awarded the Attorney General's Exceptional ServiceAward (1996), given for "extraordinary courage and voluntary risk of life inperforming an act resulting in direct benefits to the Department of Justiceor the nation." He also has been awarded the Federal Law EnforcementFoundation's Federal Prosecutor Award (1997), and the Henry L. StimsonAward for Outstanding Public Service (2001).

Since 2004, Mr. Khuzami, 52, has been General Counsel for the Americas atDeutsche Bank. In that role, he has supervised more than 100 lawyerssupporting the bank's various businesses in the Americas, and has overseenAmericas-based litigation and regulatory enforcement actions. From 2002 to2004, he served as Global Head of Litigation and Regulatory Investigationsfor the bank.

Mr. Khuzami served as a law clerk for the Honorable John R. Gibson of theU.S. Court of Appeals for the Eighth Circuit in Kansas City, Mo. He receivedhis J.D. from the Boston University School of Law, and graduated magnacum laude from the University of Rochester, where he was elected to PhiBeta Kappa.

# # #

http://www.sec.gov/news/press/2009/2009-31.htm

Home | Previous Page Modified: 02/19/2009To: Herr Josef From: Deepak April 20, 2009























Deepak claims that even though he did everything he could, we as a company didn’t realize (those projects), but actually he did not prepare the proposal for us to consider. Deepak’s investment plan “phase 1: to buy stock while they are cheap” and “phase 2: to negotiate (…) with companies” (document Koo11, p.3) is not particularly original. (…) In order to this it is necessary to choose a company, to decide the volume of the stocks that should be bought, to assess the risk of depreciation of stocks; but Deepak didn’t do it. p.15 (5) Deepak claims that his responsibilities were (1) investment into listed and unlisted companies (2) investment into real estate (3) subprime loans (4) building relations within the group, but that is not truth. (A) About listed and unlisted companies Deepak claims that his duty was “proposing TOB of JREIT companies” {{I’m not sure if this is the correct expression in English, but hopefully you know what it means}} , and I guess he refers to the Contrary Project. However, he only performed market and business chance analysis. He did not specify which JREIT company would be the target, how many investment openings (toushi-guchi), how much time it takes, what are the types of risks involved (…) how much profit can be earned. He didn’t make any concrete plans. He didn’t do the “due diligence” for real, only based in the publicly available information. Deepak was supposed to obtain the exclusive (or: private) information (hikoukai jouhou) upon signing the agreement about confidentiality with JREIT companies. Otherwise there would be no way for our company to make a judgment as to whether the stock price of the company in question is lower than its real price or not. Even if we had the information based on which we were able to make the judgement, Deepak did not explain how he would realize the genuine value if he buys only a small number of investment openings. (toushi-guchi) {(DEEPAK, this part seems very important, but I’m afraid my knowledge of the stocks and stuff is not enough to provide you a decent translation)}

p.16 (continued) This is because Deepak has not thought carefully about how to actually make JREIT companies unlisted, and how to overcome many obstacles. Deepak’s idea was that if he buys investment openings at the open market and negotiates with the management, that some day he will maybe get the fees. He did not take care of the Company’s money or think seriously of finding a catalyst necessary to perform the deal. To summarize, Deepak’s “proposing TOB of JREIT companies” was nothing more than analyzing of the market and business chances; he did not explain the details of the


Deepak

Documents

20090420 Deutsche Bank, Insider Trading Watermark)