Finra fines Deutsche Bank for 'squawk box' failures
Deutsche Bank has been fined $12.5m by industry regulator Finra for its failure to prevent the leaking of potentially non-public information over its 'squawk box' internal intercom system. The industry regulator claimed that Deutsche Bank had ignored warning signs about this potential breach of confidentiality, citing a lack of supervision and a disregard for risk assessments and compliance recommendations.

Deutsche Bank has been slapped with a $12.5 million fine for failing to prevent the dissemination of confidential information over its 'squawk box' internal speaker system.

The Financial Industry Regulatory Authority (Finra) says that Deutsche Bank Securities was guilty of significant supervisory failures in the way it sent out research and trading-related information via 'hoots' over the speaker system.



The bank was aware that hoots involving research and trading might contain confidential, price-sensitive information, and that there was a risk that material non-public information could be communicated over them.



Yet, for several years, the firm "repeatedly ignored red flags" indicating that its supervision was inadequate, says Finra.



Brad Bennett, chief of enforcement, Finra, says: "Deutsche Bank's disregard of years of red flags including internal audit findings, risk assessments and compliance recommendations was particularly egregious given the risk that material nonpublic information could be communicated over squawk boxes."



Deutsche Bank has neither admitted nor denied the charges but in addition to the fine has agreed to provide a written certification that it has implemented new supervisory systems for hoots.



