Deutsche Bank Securities will pay a US$9.5 million penalty after U.S. regulators alleged that the firm failed to properly safeguard unpublished information generated by its research analysts.
The U.S. Securities and Exchange Commission (SEC) said that it found the firm lacked adequate policies to prevent analysts from disclosing opinions, changes in estimates, and trade recommendations that were not yet published. These revelations came in morning calls, trading day squawks, idea dinners and non-deal road shows.
The SEC says that the firm also published an improper research report and failed to properly preserve electronic records that were sought during its investigation.
Deutsche Bank consented to the SEC’s order and agreed to be censured, without admitting or denying the regulator’s findings.
“Information generated by research analysts such as ratings, views, estimates, and trading recommendations can move markets,” said Antonia Chion, associate director of the SEC’s enforcement division. “Broker-dealers must maintain and enforce policies and procedures that are reasonably designed in light of the nature of their business to prevent the misuse of such information.”