The Securities and Futures Commission (SFC) has imposed a fine of $23.8 million on Deutsche Bank Aktiengesellschaft (DB) for a series of regulatory breaches, including overcharging clients on management fees, misclassifying product risk ratings, and failing to disclose investment banking relationships in research reports. The disciplinary action follows self-reports made by DB from December 2020 to December 2023, revealing that the bank overcharged clients approximately $39 million due to various deficiencies in its processes. Specifically, DB failed to apply agreed discounted management fee rates, incorrectly valued debt instruments, and misstated valuations of private equity and real estate funds. Additionally, the SFC found that DB did not disclose its investment banking relationships in 1,851 research reports from 2014 to 2021 and assigned incorrect risk ratings to 40 exchange-traded funds. In determining the penalty, the SFC recognized DB’s cooperation, remediation efforts, and the absence of deliberate misconduct.
Resources: https://apps.sfc.hk/edistributionWeb/gateway/EN/news-and-announcements/news/doc?refNo=25PR132
