Deutsche Asset Management Unit Pays $25 Million to Settle "Greenwashing" and AML Violations
From the desk of Jim Eccleston at Eccleston Law
Deutsche Bank AG's DWS asset management unit has agreed to a $25 million settlement with the Securities and Exchange Commission (SEC) over two separate issues.
DWS will pay $19 million for making "materially misleading statements" regarding its incorporation of environmental, social, and governance factors into research and investment recommendations. Secondly, DWS will pay an additional $6 million for failing to establish a proper anti-money laundering (AML) program for one of its mutual funds. DWS agreed to the settlement without admitting or denying the SEC's findings.
Various agencies, including the SEC, have scrutinized DWS since a former employee, Desiree Fixler, publicly disclosed allegations over two years ago. Fixler claimed that the asset manager had exaggerated its ESG credentials. Those allegations and subsequent investigations negatively affected the firm's share price as investors tried to gauge the financial implications.
According to AdvisorHub, this settlement represents the largest fine obtained by the SEC under the leadership of Chair Gary Gensler as part of their efforts to tighten regulations on how asset managers categorize ESG (Environmental, Social, and Governance) funds.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
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