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PEOPLE - A Tough Call

CeWe Color, a German photo-processing equipment maker, has filed a criminal complaint with the Frankfurt federal prosecutor against investment banker Sebastian Freitag for breach of privacy.

CeWe Color, a German photo-processing equipment maker, has filed a criminal complaint with the Frankfurt federal prosecutor against investment banker Sebastian Freitag for breach of privacy. Freitag’s crime, according to CeWe Color: publicizing to outsiders the alleged transcript of a January conference call that Freitag maintains shows evidence of a conspiracy between CeWe’s CEO and supervisory board chairman to drive down the company’s share price with a profit warning. Freitag believes that CeWe would have considered issuing the warning to prompt activist shareholder David Marcus of New York–based MarCap Investors to cut his losses and sell his 10.3 percent holding. Frankfurt-based investment banking boutique Freitag & Co., has been advising MarCap and Boston-based K Capital in their campaign to push CeWe to return cash to shareholders. CeWe denies there ever was a plot to drive the share price lower. But the evidence, allegedly transcribed from a 23-minute conversation by one of Freitag’s employees after the two CeWe executives thought everyone else had hung up from a one-hour conference call, has sparked an investigation by the German government securities watchdog BaFin. “The best defense isn’t always counterattack,” says Freitag, who calls CeWe’s breach-of-privacy complaint “clearly ridiculous.”