Fideres provided comprehensive economic analysis supporting claimants in the landmark market manipulation litigation between Kaupthing Bank and Deutsche Bank (Case No. HC12D04602) in the English courts, examining alleged manipulation of credit default swap markets through structured credit-linked note transactions.
Fideres conducted detailed analysis of the complex credit-linked note (CLN) transactions where Deutsche Bank issued notes to special purpose vehicles that Kaupthing was financing to purchase credit default swaps on itself. The expert examination focused on how these transactions artificially influenced Kaupthing’s CDS spreads and market perceptions of the bank’s creditworthiness during the critical period leading up to its 2008 collapse.
The economic analysis, covering approximately €509 million in claims, demonstrated the manipulative nature of the scheme where Kaupthing effectively purchased insurance on its own debt to send false positive signals to the market. The comprehensive expert work contributed to Deutsche Bank’s decision to settle the proceedings for €425 million in the first quarter of 2017, avoiding a full court examination of the alleged market manipulation scheme.