DWS has agreed to pay $19m to the Securities and Exchange Commission (SEC) to settle a historic greenwashing probe.
The SEC charged the German asset manager on Monday, 25 September, for misstatements linked to its sustainable investments, allegations brought by former employee Desirée Fixler.
The penalty, which is the largest ever handed down by the SEC for an ESG offence, will rise to $25m after being accused of anti-money laundering violations in a separate probe.
It comes after DWS earmarked €21m in its half-year results to settle the investigation.
Fixler, who is speaking at ETF Stream’s ETF Buyer: London event on 7 November, claimed DWS made misleading statements in its 2020 annual report, overstating the size of its ESG assets.
“DWS advertised that ESG was in its DNA, but, as the SEC’s order finds, its investment professionals failed to follow the ESG investment process that it marketed,” Sanjay Wadhwa, deputy director of the SEC’s division of enforcement and said if its ESG task force said.
A DWS spokesperson said the firm was “pleased to have resolved the matter” and noted it had since addressed “processes procedures and marketing practices”.
German regulator BaFin and criminal prosecutors in Germany have also been investigating the company since the Fixler allegations.
Current CEO Stefan Hoops said investigations in Germany were still ongoing and could not rule out an outcome involving financial penalties.
In February, Hoops said the asset manager had been made a “public guinea pig” by the investigations with other asset managers likely also guilty of overestimating their ESG credentials.