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- Sarah ten Siethoff is New Associate Director of SEC Investment Management Rulemaking Office
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- Credit Suisse to Pay $47Mn to Resolve DOJ Asia Probe
- SEC Chair Clayton Goes 'Hat in Hand' Before Congress on 2019 Budget Request
- SEC's Opening Remarks to the Elder Justice Coordinating Council
- Massachusetts Jury Convicts CA Attorney of Securities Fraud
- Deutsche Bank Says 3 Senior Investment Bankers to Leave Firm
- World’s Biggest Hedge Fund Reportedly ‘Bearish On Financial Assets’
- SEC Fines Constant Contact, Popular Email Marketer, for Overstating Subscriber Numbers
- SocGen Agrees to Pay $1.3 Billion to End Libya, Libor Probes
- Cryptocurrency Exchange Bitfinex Briefly Halts Trading After Cyber Attack
- SEC Names Valerie Szczepanik Senior Advisor for Digital Assets and Innovation
- SEC Modernizes Delivery of Fund Reports, Seeks Public Feedback on Improving Fund Disclosure
- NYSE Says SEC Plan to Limit Exchange Rebates Would Hurt Investors
- Deutsche Bank faces another challenge with Fed stress test
- Former JPMorgan Broker Files racial discrimination suit against company
- $3.3Mn Winning Bid for Lunch with Warren Buffett
- Julie Erhardt is SEC's New Acting Chief Risk Officer
- Chyhe Becker is SEC's New Acting Chief Economist, Acting Director of Economic and Risk Analysis Division
- Getting a Handle on Virtual Currencies - FINRA
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NEWSLETTERS & ALERTS
Deutsche Bank Fined Over Misleading Hedge Fund Disclosures
by Howard Haykin
In marketing materials, requests for proposal (RFPs), and other related documents provided to clients, DBTCA disclosed that it relies on an independent, in-house research group (“Research Group”) that uses a multi-step due diligence process to identify, evaluate, and select best-in-class mutual funds, ETFs and alternative products, including Hedge Funds, selected from a broad database of asset managers.
WHAT WENT WRONG. However, according to the SEC, from as early as 2009 through mid-2018, DBTCA failed to also disclose that the Research Group limited its review and selection of Hedge Funds to only those managers that agreed to pay a portion of its management fee to DBTCA - payments referred to as “retrocessions.”
- DBTCA’s advisory agreements disclosed that DBTCA “may” receive all or a portion of management fees that pooled investment vehicles charge, when, in fact, the payment of retrocessions was a requirement for all Hedge Funds that DBTCA recommended.
- Though each client who invested in Hedge Funds were advised that DBTCA would receive from such Hedge Funds the aforementioned retrocession, they were not told that DBTCA recommended only those Hedge Funds that agreed to pay retrocessions.
For further details on this case, click on … SEC Administrative Proceeding File No. 3- 19154.