DWS Group, the asset management arm of Germany’s Deutsche Bank, is reportedly being investigated by US authorities over sustainability claims.

The firm found itself in trouble after its former sustainability head said that the company exaggerated its sustainable investing criteria to manage its assets, WSJ reported citing people familiar with the matter.

According to the sources, the investigation by the Securities and Exchange Commission (SEC) and federal prosecutors in Brooklyn and New York are currently in the initial stages.

The probe follows an earlier report by WSJ on the $1trn asset manager’s efforts to overstate its sustainability strategy citing documents and the firm’s former sustainability chief.

The publication reported that the DWS grappled with its environmental, social and governance (ESG) investing strategy and mislead the investors occasionally.

Spokespersons for the US attorney’s office in Brooklyn and SEC did not comment on the news.

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A spokesman for Deutsche Bank also declined to comment, while a DWS spokesman said that the firm doesn’t comment on questions related to litigation or regulatory matters.

Earlier this year, SEC introduced an enforcement task to find misleading ESG claims by investment advisers and public companies.

Deutsche Bank own a majority of DWS, which operates as a separately listed company in the country.

The latest investigation is seen as a major setback for the German lender, which has reached several settlements with the authorities in the past.

In January this year, Deutsche Bank resolved a separate government probe into a commodities-fraud scheme by agreeing to pay $130m.

In May this year, reports suggested that DWS was carrying out final discussions for the sale of a controlling interest in its IKS fund platform to French private equity firm BlackFin Capital Partners.

In January, the firm picked a 24.9% interest in Arabesque AI, a UK-based technology firm with an AI engine to forecast stock price.