Deutsche Bank Sec. fined USD12.5 mln for inadequate communication supervision

Aug 09, 2016 (LBO) - The Financial Industry Regulatory Authority (FINRA) in the U.S. has fined Deutsche Bank Securities Inc 12.5 million dollars for failure to supervise which employees had access to confidential information. FINRA said it had fined the entity for "significant supervisory failures related to research and trading-related information it disseminated to its employees, called 'hoots' or 'squawks,' over internal speakers commonly known as 'squawk boxes.'" Sensitive information meant only for research and trading employees had also been heard by private client services employees, including brokers and financial advisers, according to a FINRA statement. FINRA is an independent, not-for-profit organization authorized by Congress to protect America’s investors and is not part of the government. FINRA did not say any brokers had misused the confidential information, which could include news about major client trades that could affect stock prices, CNBC reported. But the watchdog accused the bank of ignoring warnings from its own compliance department that its policies and supervisors did not adequately control who heard the "squawks," according to the settlement.
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Deutsche Bank spokeswoman Amanda Williams declined to comment. The bank did not admit or deny the charges, which applied to a period spanning 2008 to 2014. In addition to paying the fine, Deutsche agreed to implement stricter supervision of employees and written procedures to protect nonpublic information from being shared on squawk boxes. This is the largest fine the Wall Street watchdog has handed down in a squawk box case. The last large fine levied to a bank in a similar matter occurred in 2009 when Merrill Lynch paid 7 million dollars to resolve issues related to several brokers and traders who misused squawks to generate illegal profits.
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