Close Close
ThinkAdvisor
17. Deutsche Bank

Regulation and Compliance > Federal Regulation > SEC

Deutsche Bank Unit to Pay $25M to Settle SEC Probes

By Nicholas Comfort

X
Your article was successfully shared with the contacts you provided.

Deutsche Bank AG’s DWS asset management arm agreed to pay a total of $25 million to settle Securities and Exchange Commission probes into alleged greenwashing and anti-money laundering control lapses.

“The SEC’s order finds that DWS advised mutual funds with billions of dollars in assets yet failed to ensure that the funds had an AML program tailored to their specific risks, as required by law,” Gurbir Grewal, the director of the SEC’s enforcement division, said in a statement on Monday.

DWS has been under scrutiny by various agencies including the SEC since a former employee, Desiree Fixler, went public over two years ago with claims that the asset manager had inflated its ESG credentials. The allegations and ensuing probes hit the firm’s share price as investors sought to assess the financial impact.

A spokesman for DWS said the firm is “pleased that the SEC recognized our cooperation in the investigation and our remediation efforts.”

DWS has rejected Fixler’s claims from the outset and Chief Executive Officer Stefan Hoops has said he stands behind the disclosures targeted in the probes. He has also said that some of the firm’s past marketing claims may have been “exuberant.”

DWS said in July that it had made €27 million ($28.7 million) of “other” provisions in its second-quarter results. The vast majority of that was for expected settlements from several probes in the US and Germany, a person familiar with the matter said at the time.

While the fine is likely to be manageable for DWS, it’s the highest ever the SEC has handed out over allegations of greenwashing. Bank of New York Mellon Corp.’s asset manager was the first in the industry to be sanctioned over the matter when the SEC forced it to pay $1.5 million in May 2022, followed by a fine of $4 million for Goldman Sachs Group Inc.’s investment arm in November.

Copyright 2023 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.