Deutsche Bank subsidiary agrees to USD25M penalties for violations
Date
9/26/2023 3:59:07 AM
(MENAFN) In a recent development, a subsidiary of Deutsche Bank, DWS Investment Management Americas Inc., has reached an agreement to pay a sum of $25 million in penalties. This settlement comes as a consequence of allegations of anti-money laundering (AML) violations and misrepresentations related to investment practices, as disclosed by the US Securities and Exchange Commission (SEC) on Monday.
The charges leveled against DWS Investment Management Americas Inc. encompass two key areas. Firstly, the subsidiary has been accused of failing to establish a comprehensive anti-money laundering program specifically tailored to mutual funds, despite the legal obligation to do so. Secondly, the SEC has highlighted instances of misstatements concerning the company's environmental, social, and governance (ESG) investment strategies.
The SEC's order underscores that DWS was entrusted with advising mutual funds holding substantial assets, and yet it neglected to ensure that these funds were equipped with an anti-money laundering program customized to address their unique risk profiles, a requirement mandated by law. Gurbir S. Grewal, the director of the SEC's Division of Enforcement, emphasized the significance of adhering to AML regulations in such contexts.
Furthermore, the SEC's investigation also scrutinized DWS's representations pertaining to its incorporation of environmental, social, and governance factors into investment recommendations. It was alleged that the company made material misstatements in this regard, potentially misleading investors. Sanjay Wadhwa, the deputy director of the SEC’s Division of Enforcement and the head of its Climate and ESG Task Force, underscored the broader message that investment advisers must align their actions with their public representations, especially concerning factors as significant as ESG considerations.
In summary, this settlement underscores the critical importance of financial institutions adhering to anti-money laundering regulations and accurately representing their investment strategies, particularly in the realm of environmental, social, and governance considerations. The penalties imposed on DWS Investment Management Americas Inc. serve as a reminder of the SEC's commitment to enforcing compliance in these vital areas of financial oversight.
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