In February 2014, FINRA announced that Deutsche Bank Securities Inc. submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured and fined $40,000. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it permitted two statutorily disqualified persons to associate with the firm.
The findings stated that although the firm had written pre-employment screening policies and procedures, it did not implement and enforce them with respect to non-registered employees transferring from another firm-related entity. The firm did not fingerprint the individual and other non-registered transferees upon their hire, nor did it conduct the requisite background checks to ensure that it was not employing a person subject to a statutory disqualification.
The findings also stated that the individual had become employed with a firm affiliate, which conducted a background check and submitted his fingerprints to the appropriate authorities. The individual completed an employment application on which he indicated he had been employed with a FINRA/New York Stock Exchange (NYSE)-regulated firm but did not disclose he had been terminated from this broker-dealer for misappropriation of customer funds and that there was an open NYSE investigation into this matter. The individual did not subsequently disclose to the affiliate that shortly after his hire, he was barred by the NYSE and was thus subject to a statutory disqualification. A firm staff member alerted the individual’s supervisor that the individual had been barred and the individual’s employment was terminated.
The findings also included that a subsequent review of firm non-registered employees disclosed a second person was subject to statutory disqualification because of a criminal conviction. As with the first individual, the firm did not conduct a background check or submit her fingerprints to the Federal Bureau of Investigation (FBI).