      NASDAQ PHLX LLCLETTER OF ACCEPTANCE, WAI VER AND CONSENT
NO. 20160502920
TO:Nasdaq PHLX LLC
c/o Department of Enforcement
Financial Industry Regulatory Authority (“FINRA”)

RE:

Deutsche Bank Securities Inc., Respondent
Member Firm
CRD No. 2525

Pursuant to Rule 9216 of Nasdaq PHLX LLC (“Phlx”) Code of Procedure,1 Deutsche Bank
Securities Inc., (the “Firm” or “Respondent”), submits this Letter of Acceptance, Waiver andConsent (“AWC”) for the purpose of proposing a settlement of the alleged rule violations
described below. This AWC is submitted on the condition that, if accepted, Phlx will not bringany future actions against the Respondent alleging violations based on the same factual findings
described herein.
I.
ACCEPTANCE AND CONSENT
A.

Respondent hereby accepts and consents, without admitting or denying the findings, andsolely for the purposes of this proceeding and any other proceeding brought by or on
behalf of Phlx, or to which Phlx is a party, prior to a hearing and without an adjudicationof any issue of law or fact, to the entry of the following findings by Phlx:
BACKGROUND
The Firm became a member of FINRA in March 1940 and Phlx on November 26, 1973,
and its registration with each of these organizations remains in effect. The firm isheadquartered in New York, New York, and has eight branch offices and approximately
1,967 registered representatives. The Firm engages in, among other things, investmentbanking, research, and securities sales and trading for institutional and individual
customers and other clients.
RELEVANT PRIOR DI SCIPLI NARY HISTORY
Respondent has no relevant disciplinary history.
SUM M ARY
Between June 2016 and August 2018 (the “Review Period”), the Firm failed to provide
for a reasonable supervisory system to achieve compliance with its best execution

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Series 9000 of The Nasdaq Stock Market LLC Rules are incorporated into Phlx Rule General 5, Section 3, and arethus Phlx Rules and thereby applicable to Phlx members, member organizations, persons associated with memberorganizations, and other persons subject to the Exchange’s jurisdiction.
STAR No. 20160502920 (MVM)      obligations when manually executing and/or facilitating options orders. The Firm also
failed to establish, maintain, and enforce written supervisory procedures (“WSPs”) thatwere reasonably designed to prevent and detect, insofar as practicable, violations of its
best execution obligations relating to manually handled options orders. As a result of theforegoing, the Firm violated Phlx Rule 748.
FACTS AND VI OLATI VE CONDUCT
1. Phlx Rule 764 requires members to use reasonable diligence to ascertain the best marketfor a security when buying or selling for a customer so that the resultant price to thecustomer is as favorable as possible under prevailing market conditions.
2. Phlx Rule 748(b) requires member organizations to provide for appropriate supervisory
control of the organization and compliance with securities laws and regulations, including
Phlx's By-Laws and Rules. Member organizations are required to provide for appropriate
written procedures of supervision and control, and to establish a separate system offollow-up and review to determine that the delegated authority and responsibility is being
properly exercised.
3. Phlx Rule 748(h) requires member organizations to establish, maintain, and enforce
WSPs, and a system for applying such procedures, reasonably designed to prevent anddetect, insofar as practicable, violations of securities laws and regulations, including
Phlx's By-Laws and Rules.
4. During the Review Period, the Firm’s Global Equity Derivatives desk handled thousandsof options orders that it received from its customers. The Firm had certain policies andprocedures in place describing the Firm’s obligation to seek best execution for options
orders. However, the Firm’s supervisory system, including its WSPs, did not establish abest execution review of options orders that were manually handled and executed by theFirm's traders.
5. As a result of the foregoing, the Firm’s supervisory system and WSPs for reviewing
manually executed and/or facilitated options orders were not reasonably designed toachieve compliance with Phlx Rule 764. Accordingly, the Firm violated PHLX Rule 748.
B.

Respondent also consents to the imposition of the following sanctions:
1. A censure; and2. A fine in the amount of $55,000.
Respondent agrees to pay the monetary sanction in accordance with its executed payment
information form.
Respondent specifically and voluntarily waives any right to claim that it is unable to pay,
now or at any time hereafter, the monetary sanction imposed in this matter.
The sanctions imposed herein shall be effective on a date set by FINRA staff.

2      II.
WAI VER OF PROCEDURAL RI GHTS
Respondent specifically and voluntarily waives the following rights granted under Phlx’s Codeof Procedure:A.

To have a Formal Complaint issued specifying the allegations against the Firm;

B.

To be notified of the Formal Complaint and have the opportunity to answer theallegations in writing;C.

To defend against the allegations in a disciplinary hearing before a hearing panel,to have a written record of the hearing made and to have a written decision issued;
andD.

To appeal any such decision to the Exchange Review Council and then to the U.S.
Securities and Exchange Commission and a U.S. Court of Appeals.

Further, Respondent specifically and voluntarily waives any right to claim bias or prejudgment ofthe Chief Regulatory Officer, the Exchange Review Council, or any member of the Exchange
Review Council, in connection with such person’s or body’s participation in discussions
regarding the terms and conditions of this AWC, or other consideration of this AWC, including
acceptance or rejection of this AWC.
Respondent further specifically and voluntarily waives any right to claim that a person violated
the ex parte prohibitions of Rule 9143 or the separation of functions prohibitions of Rule 9144, inconnection with such person’s or body’s participation in discussions regarding the terms andconditions of this AWC, or other consideration of this AWC, including its acceptance or rejection.
III.
OTHER MATTERS
Respondent understands that:A.

Submission of this AWC is voluntary and will not resolve this matter unless anduntil it has been reviewed and accepted by FINRA’s Department of Enforcement
and the Exchange Review Council, the Review Subcommittee, or the Office ofDisciplinary Affairs (“ODA”), pursuant to Phlx Rule 9216;

B.

If this AWC is not accepted, its submission will not be used as evidence to prove
any of the allegations against the Respondent; andC.

If accepted:
1.

This AWC will become part of the Respondent’s permanent disciplinary
record and may be considered in any future actions brought by Phlx or any

3      other regulator against the Respondent;

D.

2.

Phlx may release this AWC or make a public announcement concerning
this agreement and the subject matter thereof in accordance with Phlx
Rule 8310 and IM-8310-3; and3.

Respondent may not take any action or make or permit to be made any
public statement, including in regulatory filings or otherwise, denying,directly or indirectly, any finding in this AWC or create the impressionthat the AWC is without factual basis. Respondent may not take any
position in any proceeding brought by or on behalf of Phlx, or to which
Phlx is a party, that is inconsistent with any part of this AWC. Nothing inthis provision affects the Respondent’s right to take legal or factual
positions in litigation or other legal proceedings in which Phlx is not aparty.

Respondent may attach a Corrective Action Statement to this AWC that is astatement of demonstrable corrective steps taken to prevent future misconduct.
Respondent understands that it may not deny the charges or make any statementthat is inconsistent with the AWC in this Statement. This Statement does notconstitute factual or legal findings by Phlx, nor does it reflect the views of Phlx orits staff.

4      The undersigned, on behalf of the Firm, certifies that a person duly authorized to act on its behalf
has read and understands all of the provisions of this AWC and has been given a full opportunity
to ask questions about it; that the Firm has agreed to the AWC’s provisions voluntarily; and that
no offer, threat, inducement, or promise of any kind, other than the terms set forth herein and theprospect of avoiding the issuance of a Complaint, has been made to induce the Firm to submit it.
Deutsche Bank Securities Inc.
Respondent
10/20/2020[Date]________
By: _____________________________
Name: Andrew Stemmer
Title: Managing Director & Associate General Counsel

10/20/2020[Date]_______ _____________________
By: ___________
Name: ____________________________
Joe Salama
Global Head of Litigation& Regulatory Enforcement
Title: _____________________________

Reviewedd bby:yy:__________________________________________
_____
C. Ke
Keats
Michael CK
atsFried, Frank, Harris, Shriver & Jacobson LLP
One New York PlazaNew York, NY 10004
Accepted by Phlx:  

_________________[Date]

Signed on behalf of the
Director of ODA, by delegated authority__________________________________Monika V. Mohan, Counsel
Department of Enforcement
Signed on behalf of Phlx, by delegatedauthority from the Director of ODA
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