The US Commodity Futures Trading Commission (CFTC) has imposed a $3m fine on the broker-dealer arm of Deutsche Bank over charges that it had failed to properly invest customer segregated funds, filed inaccurate financial reports and maintained inaccurate books and records.
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The Deutsche Bank Securities (DBSI) unit failed to accurately compute the amount of customer funds it had on deposit from 18 June 2012 to 15 August 2012, resulting in the firm investing an amount in certain money market mutual funds that exceeded 50% asset-based concentration limit of CFTC.
The CFTC order also found that DBSI failed to file accurate financial statements with the CFTC in a timely manner on at least six occasions from June 2011 to March 2013.
The firm did not have automated processes in place to guarantee the accuracy of its financial reporting, the CFTC said.
Additionally, DBSI failed to keep complete records on a number of block trades executed from October 2009 to March 2012. However, no client losses were incurred as a result of the breaches.
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By GlobalDataAccording to the CFTC, these violations were a result of DBSI’s failure to maintain adequate controls and systems, reflecting a lack of supervision over its business as a CFTC registrant.
CFTC director of the division of enforcement Aitan Goelman said: "This case demonstrates that the Commission takes the sufficiency of its registrants’ internal controls very seriously, and expects that these internal controls will both address known issues and identify regulatory risks to minimize the possibility of violations like this."
