The United States Financial Industry Regulatory Authority (FINRA) announced on August 23, 2021 a settlement with Garrett Scott Neubart, a General Securities Representative of Deutsche Bank Securities Inc.

Under the settlement, the respondent accepts a two-month suspension from associating with any FINRA member in all capacities.

From September 2017 through November 2018, while associated with Deutsche Bank, Neubart violated FINRA Rules 3270 and 2010 by engaging in an outside business activity without providing prior written notice to the firm.

During the relevant period, Neubart was employed as a director in Deutsche Bank’s Institutional Equity Sales Group. In that role, Neubart serviced institutional clients. His job responsibilities did not include introducing service providers to his clients or colleagues at Deutsche Bank.

From September 2017 through November 2018, Neubart scheduled and attended meetings between an artificial intelligence (AI) company and his institutional clients at Deutsche Bank in an effort to market the AI company’s products and services to the clients. In preparation for these meetings, Neubart, using his Deutsche Bank email address, sent the clients pitch books, marketing decks, and other information on the AI company.

During the same period, Neubart arranged for introductions between the AI company and employees in Deutsche Bank’s Research Department to discuss the AI company’s products and services.

In January 2018, as compensation for his efforts, Neubart received Incentive Units from the AI company, for a nominal price, entitling Neubart to purchase shares of the company for a fixed price at any time of his choosing.

Previously, the AI company had only given its employees and contractors the opportunity to own Incentive Units.

Neubart did not provide prior written notice to or receive approval from Deutsche Bank to engage in outside business activities involving the AI company. In November 2017, Neubart orally requested approval from Deutsche Bank to engage in outside business activities involving the Al company, but the firm’s Compliance Department told Neubart he could not engage in any outside activities with the AI company or receive compensation in connection with outside business activities.

Neubart then inaccurately characterized his receipt of Incentive Units from the AI company as a “passive investment” in a disclosure to the firm in December 2017. In addition, on his annual compliance attestations in 2017 and 2018, Neubart inaccurately certified to the firm that he had disclosed all outside business activities.

FINRA notes that Deutsche Bank cut Neubart’s bonus for his conduct involving the AI company.