Investing.com -- Deutsche Bank (ETR:DBKGn) Securities Inc., a registered broker-dealer and subsidiary of Deutsche Bank AG (NYSE:DB), has been charged by the Securities and Exchange Commission (SEC) for failing to file certain Suspicious Activity Reports (SARs) on time. As a result, the firm has agreed to pay a $4 million civil penalty to settle the charges.
Under the Bank Secrecy Act and regulations set by the U.S Department of the Treasury’s Financial Crimes Enforcement Network, broker-dealers are mandated to file SARs for transactions suspected to involve funds from illegal activity, those lacking a clear business or lawful purpose, or those intended to facilitate criminal activity.
The SEC's order revealed that Deutsche Bank Securities had received requests relating to law enforcement or regulatory investigations or litigation, which necessitated the conduct of SARs investigations. The order found that, from April 2019 to March 2024, Deutsche Bank Securities did not carry out or complete the investigations within a reasonable timeframe, including at least two instances where it took over two years to file the SARs.
Sheldon L. Pollock, Associate Director of the SEC’s New York Regional Office, stated, “Even the best information collected from SARs is of limited use if its stale by the time it’s provided to law enforcement.” He further emphasized the importance of timely filing of SARs and held this enforcement action as a clear message to other market registrants.
The SEC’s order concluded that Deutsche Bank Securities violated Section 17(a) of the Securities Exchange Act and Rule 17a-8 thereunder. Without admitting or denying the SEC’s findings, Deutsche Bank Securities agreed to a censure, a cease-and-desist order, and the aforementioned civil penalty.
The SEC’s investigation involved a team from its New York and Boston Regional Offices, with assistance from the Office of Market Intelligence’s Bank Secrecy Act Review Group. The examination leading to the investigation of Deutsche Bank Securities was conducted by the Division of Examinations.
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