Deutsche Bank Fined By SEC, New York AG Over Dark Pool Order Routing

Deutsche Bank [s:db] will pay a total of $37 million to the Securities and Exchange Commission and the New York Attorney General to settle charges it misled clients about how its automated trade router funneled orders to its dark pools. Deutsche Bank admitted the facts and acknowledged that its conduct violated the federal securities laws. Deutsche Bank made materially misleading statements and omissions about how its order router, known as SuperX+, measured execution quality and the level of liquidity of venues to which it sent orders, according to the SEC. Deutsche Bank used the dark pool ranking model to determine which venues would receive the orders and the sequence in which the bank's brokers would send them. However, due to a coding error, Deutsche Bank updated the model only once in two years, leading to inflated rankings for two dark pools and non-optimal routing of orders, according to the SEC. Deutsche Bank also ignored the automated rankings in some cases and gave some venues order fill performance statistics that were inconsistent with their actual performance.