October 3, 2022

Volume XII, Number 276

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October 03, 2022

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As Part of Global Crackdown on Greenwashing, German Prosecutors Raid Asset Manager

The international news media have publicly reported that German law enforcement has raided an asset manager concerning a "whistleblower's allegations that [the asset manager] sold investments as 'greener' or 'more sustainable' than they were, a practice known as 'greenwashing'."  This action by German prosecutors reflects a broader concern by financial regulators about the issue of greenwashing, as reflected by a recent $1.5 million issued by the SEC against a U.S. firm concerning similar allegations. 

Indeed, last week the SEC issued extensive proposed regulations that would combat "greenwashing" by compelling firms to detail how their investments reflect ESG principles, and prohibiting funds from bearing names incorporating ESG references without also adopting ESG investment principles. 

Based upon these enforcement actions, and these newly proposed regulations, it is clear that global financial regulators are focused on the issue of "greenwashing," and are actively taking steps to combat this practice. 

Regulators and policymakers have pledged to clamp down on companies making exaggerated claims about the sustainability credentials of their products as they try to cash in on booming demand for ESG investing.

Enforcement action has been minimal so far, although watchdogs are beginning to tighten the screws.

 

©1994-2022 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.National Law Review, Volume XII, Number 153
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About this Author

Jacob Hupart Commercial Attorney Litigation Mintz Levin Cohn Ferris Glovsky and Popeo PC
Member

Jacob has a multifaceted litigation practice that encompasses complex commercial litigation, including cases involving securities, employment, and environmental claims, as well as class action litigation, white-collar criminal defense, and regulatory investigations. He has extensive experience handling all phases of litigation before federal and state courts, managing discovery, and conducting settlement negotiations. Jacob has represented clients in a variety of industries, including financial services, energy, education, and the media.

Prior to joining Mintz, he was an associate...

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