Deutsche Bank’s investment subsidiary DWS, based in the US, was set to pay $25 million in penalties to the US Securities and Exchange Commission (SEC) for misstatements regarding “green” investments and insufficient money laundering controls.
The SEC on Monday said it charged “in two separate enforcement actions, one addressing its failure to develop a mutual fund Anti-Money Laundering (AML) program, and the other concerning misstatements regarding its Environmental, Social, and Governance (ESG) investment process.”
To settle the charges, DWS agreed to pay $25 million – $6 million for the anti-money laundering schemes and $19 million for the ESG misstatements – without admitting or denying the SEC’s findings.
“We are pleased to have resolved these matters that relate to certain historic processes, procedures and marketing practices the firm has since addressed,” DWS said on Monday.
DWS had been accused of marketing financial products as “greener” than they actually are.
Due to the “greenwashing” allegations, there were also investigations by supervisory and criminal authorities. In this case the term refers to accusations that asset managers had overstated progress in sustainability on issues such as environmental protection and climate change.
The investigations followed revelations from Desiree Fixler, a former DWS employee tasked with sustainability at the asset manager. DWS has consistently rejected allegations of greenwashing.
The Deutsche Bank subsidiary pointed out that the SEC found “no misstatements in relation to our financial disclosures or in the prospectuses of our funds.”
Environmental organization Greenpeace said “greenwashing” finally entailing criminal consequences was a success.
“The heavy fine imposed on DWS by the powerful US financial regulator SEC clearly shows that consumer deception on environmental issues is not a trivial offence,” said Greenpeace financial expert Mauricio Vargas in a statement.