SEC Charges DWS Investment Management Americas Inc. with AML & ESG Violations, Orders $25M in Penalties

The Securities and Exchange Commission (SEC) announced today that DWS Investment Management Americas Inc. (DIMA or DWS), a subsidiary of Deutsche Bank AG, has been charged with two separate enforcement actions. DIMA agreed to pay a total of $25 million in penalties for these offenses. The first action addresses DIMA’s failure to develop a mutual fund Anti-Money Laundering (AML) program to comply with the Bank Secrecy Act and applicable Financial Crimes Enforcement Network regulations, as well as their failure to adopt and implement policies and procedures reasonably designed to detect activities indicative of money laundering and to conduct AML training specific to the mutual funds' business. The second enforcment action resulted from DIMA making materially misleading statements about its controls for incorporating Environmental, Social, and Governance (ESG) factors into research and investment recommendations for ESG integrated products, including certain actively managed mutual funds and separately managed accounts. Without admitting or denying the SEC’s findings, DIMA agreed to a cease-and-desist order and a $6 million penalty in the AML action; and to a cease-and-desist order, censure, and a $19 million penalty in the ESG misstatements action.