Deutsche Bank Securities agreed to pay $9.5 million to settle SEC claims that it did not safeguard private information created by the firm’s equity research analysts when speaking with its clients as well as its sales and training staff, the agency announce Wednesday.
Deutsche Bank Securities “lacked adequate policies and procedures to prevent analysts from disclosing yet-to-be-published views and analyses, changes in estimates, and short-term trade recommendations,” said a news release from the Securities and Exchange Commission.
The SEC also said Deutsche Bank issued a research report with a “buy” rating for discount retailer Big Lots Inc. when the analyst who covered the company privately told others that Big Lots should have been downgraded.
“Information generated by research analysts such as ratings, views, estimates and trading recommendations can move markets,” said Antonia Chion, associate director of the SEC division of enforcement, said in the news release. “Broker-dealers must maintain and enforce policies and procedures that are reasonably designed in light of the nature of their business to prevent the misuse of such information.”
Deutsche Bank neither admitted nor denied the claims, the SEC said.
“We are pleased to have resolved this matter,” Deutsche Bank said in a statement, adding that it has enhanced its research analysis policy and controls in response to the SEC’s concerns.