Compliance December 22, 2006

Deutsche Asset Management Settles Alleged Market Timing Accusations

Deutsche Asset Management (DeAM) confirmed Thursday that it has settled proceedings with the Securities and Exchange Commission (SEC) and New York Attorney General Eliot Spitzer related to alleged improper market timing accusations against Deutsche Asset Management Inc. and Deutsche Investment Management Americas Inc., the investment adviser to many of the DWS Scudder Funds.

Reported by

Rebecca Moore

According to a Deutsche news release, the firm is settling with Spitzer and the SEC under two separate proceedings. Under the terms of the settlement with Spitzer, Deutsche has consented, without admitting or denying any wrongdoing, to a payment of approximately $122 million, including approximately $102 million in disgorgement and/or restitution and a civil money penalty in the amount of $20 million. Under the SEC settlement, Deutsche has consented, without admitting or denying any wrongdoing, to disgorgement and/or restitution and a civil money penalty in the amount of $17 million, which will be deemed to be paid through the payments made under the Spitzer settlement.

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Deutsche said approximately the entire $122 million will be distributed for the benefit of shareholders of the affected funds in accordance with a plan to be developed by a distribution consultant. The announcement pointed out the alleged arrangements originated in businesses that existed prior to the current Deutsche organization and were terminated prior to the investigations, which began in the summer of 2003.

In addition to the payments, Deutsche has agreed to certain business changes, including, among other things, maintaining existing management fee reductions for certain funds for a five year period and the formation of Code of Ethics Oversight and Internal Compliance Controls Committees, the release said. Deutsche also said it continues to discuss a settlement with the Illinois Secretary of State regarding market timing matters and expects the settlement to provide for investor education contributions totaling approximately $4 million and a payment in the amount of $2 million to the Securities Audit and Enforcement Fund.

In January, Deutsche announced it was close to a settlement with Spitzer and the SEC and predicted the settlement would cost $134 million. The companies involved were accused of allowing market timing in the Scudder Funds and not using sufficiently strong measures to prevent the abusive trading practices during the 1999 to 2001 period.