FINRA Fines Deutsche Bank $12.5 Million for Supervisory Failures

The Financial Industry Regulatory Authority (FINRA) fined Deutsche Bank $12.5 million for significant supervisory failures related to research and trading-related information called “hoots” or “squawks” over internal speakers referred to as “Squawk boxes.” FINRA claims that Deutsche Bank failed to establish adequate supervision over registered representatives’ access to hoots or their communication with customers regarding hoots. Deutsche Bank was also accused of failing to respond to red flags with regard to their supervision issues involving confidential information. The bank’s disregard of years of red flags, including internal audit findings, risk assessment and compliance recommendations was particularly egregious given the risk that material nonpublic information could be communicated over the squawk boxes.

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