Deutsche Bank to pay more than $40 million to settle dark pool cases

Fri Dec 16, 2016 8:35pm EST
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By Sarah N. Lynch

WASHINGTON (Reuters) - A unit of Deutsche Bank AG conceded that it misled investors and violated securities laws and will pay more than $40 million to settle charges that it misinformed clients about how it routed orders to anonymous trading platforms known as dark pools, regulators said on Friday.

The bank agreed to pay $37 million to settle charges from federal and New York state regulators, and an additional $3.25 million to the Financial Industry Regulatory Authority (FINRA), Wall Street's self-funded regulator.

In settling with both the New York Attorney General and the U.S. Securities and Exchange Commission, Deutsche Bank also admitted that its marketing materials about how it routed orders to various dark pools were misleading. The problems were due to a computer coding error, according to the documents related to that settlement.

FINRA's charges against the bank, meanwhile, revolved around "deficient disclosures" by the bank's own dark pool trading platform itself. The bank settled that matter without admitting or denying any wrongdoing.

“Deutsche Bank is pleased to have resolved these matters," Deutsche spokeswoman Amanda Williams said in a statement.

"We believe that all concerns described in the settlements, which do not allege intentional wrongdoing or misconduct, have been remediated.”

The SEC in recent years has been on the prowl for violations of complex equity market structure rules that are designed to ensure fairness for all investors.

Those cases have targeted exchanges, brokers and dark pools for a variety of problems, from misleading investors about their services, to giving some investors an edge by providing them with faster access to trading data.   Continued...

A statue is pictured next to the logo of Germany's Deutsche Bank in Frankfurt, Germany September 30, 2016. REUTERS/Kai Pfaffenbach/File Photo