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Deutsche Bank fined $2 million over dark pool routing lapses

(Bloomberg) — A unit of Deutsche Bank AG has agreed to pay a $2 million fine to an industry-backed regulator for failing to ensure its customers get the best prices for securities orders.

Deutsche Bank Securities Inc. improperly routed certain customer orders through its dark pool called SuperX from January 2014 to May 2019, the Financial Industry Regulatory Authority said in a statement on Tuesday. The regulator said the brokerage, which did not admit or deny the allegations, failed to change the arrangement despite knowing that it resulted in delays and lower order filling rates.

Read more: Deutsche Bank admits to misleading clients in dark pool trades

The firm was accused of violating the so-called best execution rule, which requires brokers to find the most favorable terms for their clients. Companies should periodically review the quality of their trade execution taking into account factors such as speed, order size and transaction cost. A bank spokesperson declined to comment.

Regulators, including the Securities and Exchange Commission, have spent years trying to root out wrongdoing on alternative trading systems, which allow customers to buy and sell shares with greater anonymity than on traditional stock exchanges.

Read more: Barclays, Credit Suisse agree to dark pool settlements

According to FINRA, in some cases, Deutsche Bank Securities placed more orders on SuperX than any other dark pool, even though the bank ranked other places higher in terms of execution quality. The regulator said the firm also failed to disclose physical information about its trading systems to investors.

According to FINRA, Deutsche Bank closed SuperX in September as part of a US equity sale and exit from the business.

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