WASHINGTON, Aug 26 (AFP) - The brokerage unit of Germany's Deutsche Bank agreed to pay an 87.5 million dollar fine to settle charges that its stock research was subject to improper influence from the firm's investment banking unit, officials said Thursday.
The Securities and Exchange Commission announced the settlement with New York-based Deutsche Bank Securities and a similar deal with Thomas Weisel Partners, which agreed to a 12.5 million dollar settlement.
The SEC said Deutsche Bank Securities will pay 25 million dollars in "disgorgement" of profits from the conflict of interest, 25 million as a penalty, 25 million to fund independent research, five million to fund investor education, and 7.5 million for failing to cooperate with investigators.
The agency alleged that the two Wall Street firms "issued research reports that were not based on principles of fair dealing and good faith and did not provide a sound basis for evaluating facts, contained exaggerated or unwarranted claims about the covered companies."
The action marked the latest crackdown against Wall Street firms that issued allegedly biased research to help their investment banking divisions underwriting stock offerings for the same firms.