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DWS has agreed to pay a total of $25 million to settle two separate enforcement actions brought by the U.S. securities regulator arising from investigations into a greenwashing scandal that has dogged the asset manager for more than two years.
The German asset manager, majority-owned by Deutsche Bank, was charged by the Securities and Exchange Commission for alleged money laundering violations and misstatements related to its environmental, social and governance investments.
“The SEC’s order shows that DWS advised mutual funds with billions of dollars in assets but failed to ensure that the funds were in good standing. [anti-money laundering] AML program tailored to their specific risks, as required by law,” Gurbir Grewal, director of the regulator’s enforcement division, said in a statement on Monday.
The SEC also accused DWS of making “materially misleading statements” about its controls over ESG factors included in investment and research recommendations for ESG products, including some actively managed mutual funds.
“DWS advertised that ESG was in its ‘DNA,’ but as the SEC’s order shows, its investment professionals did not follow the ESG investment processes it marketed,” said Sanjay Wadhwa, deputy director of the Enforcement Division of the SEC.
DWS agreed to the penalties without admitting or denying the SEC’s findings. The company said it was “pleased” to have resolved the matter, adding that the SEC found no misstatements related to the funds’ financial disclosures or prospectuses.
DWS said that “the weaknesses identified by the SEC relate to processes and procedures that the company has already taken steps to address.”
This is a development story