Deutsche Bank Securities, a subsidiary of Deutsche Bank AG, has been fined $4m by the SEC for its failure to file certain SARs in a timely manner.
This fine is part of a settlement where Deutsche Bank Securities did not admit or deny the findings but agreed to a censure and a cease-and-desist order in addition to the financial penalty.
According to the SEC’s findings, the broker-dealer, which is mandated under the Bank Secrecy Act and regulations by the U.S. Department of the Treasury’s Financial Crimes Enforcement Network, was sluggish in handling investigations related to SARs. These reports are crucial for flagging transactions that might involve funds derived from illegal activities, lack a legitimate business purpose, or are designed to aid criminal undertakings.
From April 2019 to March 2024, Deutsche Bank Securities displayed significant delays in their investigative process, notably taking more than two years in at least two instances to file the required SARs. “Even the best information collected from SARs is of limited use if it’s stale by the time it’s provided to law enforcement,” SEC’s New York Regional Office Associate Director Sheldon L. Pollock commented. This enforcement action not only holds Deutsche Bank Securities accountable but also serves as a stern reminder to other market participants about the critical nature of timely reporting.
The incident underscores the broader regulatory emphasis on the prompt and efficient management of financial surveillance reports to prevent the misuse of the financial systems and to support law enforcement in identifying and acting on illegal activities swiftly.
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