Deutsche Bank Subsidiary to Pay $4 Million Fine for Late Reporting of Suspicious Transaction Reports

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Deutsche Bank Subsidiary to Pay $4 Million Fine for Late Reporting of Suspicious Transaction Reports

Deutsche Bank AG's registered broker-dealer subsidiary, Deutsche Bank Securities Inc., has been charged by the Securities and Exchange Commission (SEC) for failing to timely report certain Suspicious Activity Reports (SARs). As a result, the firm agreed to pay a civil penalty of $4 million to resolve the charges.

According to the Bank Secrecy Act and the regulations of the Financial Crimes Enforcement Network of the U.S. Department of the Treasury, broker-dealers are required to report SARs for transactions involving funds suspected to be derived from illegal activities, transactions lacking a clear business or legal purpose, or transactions intended to facilitate criminal activity.

The SEC's order revealed that Deutsche Bank Securities had received requests related to law enforcement or regulatory investigations, or lawsuits that required the execution of SAR investigations. The decision noted that between April 2019 and March 2024, Deutsche Bank Securities did not conduct or complete its investigations in a reasonable time frame, with SAR filings taking more than two years in at least two instances.

Sheldon L. Pollock, Deputy Director of the SEC's New York Regional Office, stated, "Even the best information from SARs has limited utility if stale by the time it reaches law enforcement." He also emphasized the importance of timely filing of SARs, labeling 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 the associated Rule 17a-8. Without admitting or denying the SEC's findings, Deutsche Bank Securities agreed to a censure, a cease-and-desist order, and to pay the civil penalty mentioned above.

The SEC's investigation involved a team from the New York and Boston Regional Offices and received assistance from the Market Intelligence Office's Bank Secrecy Act Review Group. The review that led to the investigation of Deutsche Bank Securities was conducted by the Examination Division.