DWS to Pay $19M to Settle SEC Greenwashing Probe

DWS to Pay $19M to Settle SEC Greenwashing Probe

The German asset manager will also pay another $6 million to settle a separate anti-money-laundering probe.

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Reviewed by: etf.com Staff
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Edited by: etf.com Staff

DWS has agreed to pay $19 million to the Securities and Exchange Commission to settle a historic greenwashing probe.

The SEC charged the German asset manager on Monday 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, or environmental, social and governance, offense, will rise to $25 million after DWS was accused of anti-money-laundering violations in a separate probe.

It comes after DWS earmarked $22 million in its half-year results to settle the investigation.

Fixler, who is speaking at ETF.Stream’s ETF Buyer: London event last 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.

DWS Rebuilding Its Reputation

DWS has been attempting to rebuild its reputation following the scandal that came to light in 2021 and that led to former CEO Asoka Woehrmann stepping down.

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 that DWS had been made a “public guinea pig” by the investigations with other asset managers likely also guilty of overestimating their ESG credentials.

Theo Andrew joined ETF Stream as a senior reporter in September 2021. He has over four years of investment writing experience spanning pensions and retail investments, most recently at Citywire, where he was a senior reporter covering environmental, social and governance investing.