BENGALURU (REUTERS) - United States authorities are investigating German lender Deutsche Bank's asset management arm DWS Group after the firm's former head of sustainability said it overstated how much it used sustainable investing criteria to manage its assets, the Wall Street Journal reported on Wednesday (Aug 25).
The probes, by the US Securities and Exchange Commission (SEC) and federal prosecutors in Brooklyn, New York, are in early stages, the newspaper said, citing sources.
A DWS spokesman told Reuters the firm does not comment on litigation or regulatory matters.
Deutsche Bank and a spokesman for the US Department of Justice declined to comment on the WSJ report, while an SEC spokesman said: "The SEC does not comment on the existence or nonexistence of a possible investigation."
The SEC, the top US markets regulator, earlier this year established a task force to root out misconduct related to environmental, social and governance (ESG) issues. With a record US$51 billion (S$69 billion) flooding into sustainable US funds in 2020 alone, according to investment research company Morningstar, investors need to be better informed, the SEC has said.
Deutsche Bank has been trying to restore its image in Washington amid several investigations into its dealings with US President Donald Trump, a long-time client.
In January, the firm agreed to pay nearly US$125 million to avoid US prosecution on charges it engaged in foreign bribery schemes and manipulated precious metals markets, the latest blow for the bank as it tries to rebound from a series of scandals.