The public prosecutor’s office in Frankfurt is still investigating against the Deutsche Bank subsidiary because of the greenwashing affair.
(Photo: REUTERS)
Frankfurt, Cologne According to Handelsblatt information, the fund company DWS could face a million fine for greenwashing. The Deutsche Bank subsidiary is negotiating with the public prosecutor’s office about the amount of a possible fine, several people familiar with the matter told the Handelsblatt. The talks are said to be at an early stage.
The public prosecutor’s office is investigating the initial suspicion of capital investment fraud based on greenwashing allegations against DWS. At the end of May 2022 there was a raid.
The listed asset manager is suspected of having systematically exaggerated its commitment to sustainability and green investments. The public prosecutor announced that the investigations are ongoing and the end is not foreseeable.
DWS did not comment specifically on whether it is negotiating a fine. “We have been working actively, openly and transparently with the authorities – and thus also with the public prosecutor’s office – since the beginning of the investigation,” said a DWS spokesman. You will continue to do that. “The clarification of the allegations and the conclusion of the external investigations continue to have the highest priority for the management.”
When and if there will be an agreement with the public prosecutor’s office and how expensive it could be for DWS is completely open. The ideas of both sides are still far apart, several people familiar with the process told the Handelsblatt.
The public prosecutor initially went into the talks with a very high sum of millions. DWS strictly rejected it, and the prosecutor’s office has already scaled down their ideas significantly, an insider said. In the meantime, sums are being argued between single-digit and “not so high” double-digit amounts, it said elsewhere.
DWS rejects speculation
DWS rejected any speculation about a possible fine. It is currently not possible to estimate when and how the Frankfurt public prosecutor’s proceedings will end. “What we can say, however, is that the orders of magnitude that have been suggested are purely speculative. We therefore emphatically reject these speculations,” said a spokesman. He added that DWS had always said “that we are interested in a quick and proper solution”. They continue to stand by their financial publications and the prospectuses of their funds.
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At the public prosecutor’s office, senior public prosecutor Markus Weimann is said to have made the case a top priority. Weimann is head of the public prosecutor’s office specializing in the fight against white-collar crime in Hesse. He is also in charge of the specialist department for capital market criminal law and property crimes with an economic background. Weimann has been investigating in the banking environment for more than 20 years.
For two years now, DWS has been accused of presenting so-called “green financial products” (ESG – Environment, Social, Governance) as “greener” or “more sustainable” than they actually were. The former sustainability officer at DWS, Desiree Fixler, publicly raised these allegations in August 2021.
Fixler initially contacted the US Securities and Exchange Commission (SEC) and the American federal police, the FBI. Official investigations in the USA and Germany were the result, including the investigations by the Frankfurt public prosecutor’s office.
Immediately after the raid, DWS replaced its CEO, Asoka Wöhrmann, with Stefan Hoops. Hoops admitted in an interview with the Handelsblatt: “In retrospect, you can already see that there was exuberant marketing on the subject of sustainability for a while – not just in asset management, by the way, but across many industries.”
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