Summary

• Deutsche Bank subsidiary DWS Investment Management Americas Inc. (DIMA) has agreed to pay a total of $25 million in penalties to settle two separate enforcement actions brought by the SEC.
• The penalties arise from DIMA's failure to establish an Anti-Money Laundering (AML) program for mutual funds it advised and its misstatements regarding its Environmental, Social, and Governance (ESG) investment process.

Deutsche Bank subsidiary DWS Investment Management Americas Inc. (DIMA or DWS) has agreed to pay a total of $25 million in penalties. The penalties arise from two separate enforcement actions brought by the Securities and Exchange Commission (SEC).

According to the SEC’s statement, DIMA failed to establish an Anti-Money Laundering (AML) program for mutual funds it advised, violating the Bank Secrecy Act and relevant Financial Crimes Enforcement Network regulations. 

“Importantly, those AML obligations require mutual funds to establish and implement individualized programs to detect and prevent money laundering and terrorism financing,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. 

The second action highlights DIMA's misstatements regarding its Environmental, Social, and Governance (ESG) investment process. DIMA marketed itself as a leader in ESG integration but failed to adequately implement its global ESG policy, misleading clients and investors. Sanjay Wadhwa, Deputy Director of the SEC’s Division of Enforcement, stressed the need for investment advisers to align their actions with their ESG representations.

In response to these charges, DIMA, without admitting or denying the findings, has agreed to cease-and-desist orders and substantial financial penalties, marking a significant chapter in the ongoing efforts to ensure transparency and integrity in the financial industry.