The U.S. Securities and Exchange Commission (SEC) has charged Deutsche Bank Securities Inc., a subsidiary of Deutsche Bank AG, for failing to file Suspicious Activity Reports (SARs) in a timely manner, resulting in a $4 million civil penalty. The charges stem from the broker-dealer’s delayed filing of reports required by the Bank Secrecy Act (BSA) to detect and prevent illegal financial activity.
SARs are critical to identifying potential criminal activity such as money laundering, fraud, or transactions that lack a lawful purpose. Under the BSA, broker-dealers are obligated to file SARs promptly when they suspect that transactions may involve illicit funds or be tied to criminal activities.
According to the SEC’s findings, Deutsche Bank Securities failed to complete SAR investigations within a reasonable time frame between April 2019 and March 2024. In some cases, the firm took more than two years to file SARs, significantly delaying their potential use in law enforcement or regulatory investigations.
“Even the best information collected from SARs is of limited use if it’s stale by the time it’s provided to law enforcement,” said Sheldon L. Pollock, Associate Director of the SEC’s New York Regional Office. “Through this enforcement action, we are not only holding Deutsche Bank Securities accountable, but we are also sending a clear message to other market participants that timeliness in filing SARs is of paramount importance.”
The SEC’s order states that Deutsche Bank Securities violated Section 17(a) of the Securities Exchange Act and Rule 17a-8, which require timely filing of SARs. In addition to the $4 million civil penalty, Deutsche Bank Securities agreed to a censure and a cease-and-desist order without admitting or denying the SEC’s findings.
The SEC’s investigation was conducted by Alicia Guo, Joshua Tannen, and Steven G. Rawlings of the New York Regional Office, and Joy Guo of the Boston Regional Office, with support from several divisions within the SEC. The investigation was supervised by Sheldon L. Pollock.
