Axiom Investment Advisors LLC et al. v. Deutsche Bank AG


An SDNY judge denied certification of two proposed classes in FX last-look matter on the grounds that the plaintiffs failed to meet predominance requirements.

Retained by Kirkland & Ellis

In a matter involving foreign exchange trade execution, plaintiffs filed breach of contract and unjust enrichment claims against Deutsche Bank. The plaintiffs alleged that Deutsche Bank delayed execution of matched FX trade orders submitted through its proprietary electronic trading platforms and other electronic communication networks (ECNs). Defense counsel retained Cornerstone Research and two experts, Terrence Hendershott of the University of California, Berkeley, and FX industry expert Philip Weisberg.

Professor Hendershott’s testimony focused on the economics of the last-look practice and damages issues.

According to plaintiffs, Deutsche Bank engaged in the FX practice known as “last look” in order to benefit its business, resulting in thousands of buy-side clients suffering significant losses. In her opinion, Judge Schofield of the Southern District of New York noted “the practice is commonly known in the FX market as a measure to protect against predatory trading strategies,” and has been discussed in industry publications and known to at least some, and perhaps many, of Deutsche Bank’s clients.

Professor Hendershott’s testimony focused on the economics of the last-look practice and damages issues, while Mr. Weisberg testified on FX market structure and industry practices. The experts’ opinions demonstrated that individual inquiry would be required to determine whether the bank’s clients were aware of or negatively impacted by Deutsche Bank’s alleged actions.

Judge Schofield declined to certify the proposed classes, including both the Express Contract Class, which involves customers who traded on the bank’s platforms, and the Implied Contract Class, which involves market participants who might have submitted an order to Deutsche Bank on an anonymous FX ECN. She opined, “Both proposed classes fail to satisfy Rule 23(b)(3) because plaintiffs have not proven predominance as to either class.”

Case Experts

Philip Weisberg

Founder, Matzliach Capital

For more information, please contact Sasha Aganin or Yan Cao.

Case Expert

Terrence Hendershott

Professor and Willis H. Booth Chair in Banking and Finance,
Haas School of Business,
University of California, Berkeley