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ESG

SEC Greenwashing Fines and the ESG Task Force That Vanished

The SEC's ESG Task Force extracted $25 million in settlements from DWS, Goldman, and BNY Mellon before the new administration disbanded it in 2025.

By The WokeCorp Team
SEC Securities and Exchange Commission building in Washington DC
The SEC's Climate and ESG Task Force opened in March 2021 and brought its first enforcement actions in 2022. By 2025, the task force had been disbanded under the new administration. · Photo via Wikimedia Commons. Public Domain.

Between May 2022 and September 2023, the SEC's Climate and ESG Task Force extracted settlements from three asset managers for the same basic violation: claiming to investors that ESG criteria were applied to fund investments when they were not. BNY Mellon paid $1.5 million. Goldman Sachs Asset Management paid $4 million. DWS paid $19 million.

In early 2025, the task force was disbanded.

The enforcement history is short: three cases, $24.5 million in total penalties, then a political reversal. But the cases established what greenwashing looks like under securities law, and that record stands regardless of what the current administration does with the task force.

Key findings

  • The SEC's Climate and ESG Task Force launched in March 2021 with 22 enforcement attorneys and analysts.
  • BNY Mellon Investment Adviser paid $1.5 million in May 2022 for claiming ESG quality reviews were applied when they were not for some funds.
  • Goldman Sachs Asset Management paid $4 million in November 2022 for misrepresenting ESG screening procedures.
  • DWS Investment Management Americas paid $19 million in September 2023 for marketing materials claiming all AUM was ESG-integrated when it was not.
  • The task force was disbanded in early 2025 under the Trump administration.
  • All three cases proceeded under Section 206 of the Investment Advisers Act (anti-fraud) and Rule 38a-1 under the Investment Company Act (compliance program requirements).

What did the SEC find in its ESG greenwashing enforcement cases?

BNY Mellon (May 2022, $1.5M): BNY Mellon Investment Adviser managed several Dreyfus funds. The fund prospectuses disclosed that all equity investments underwent ESG quality review. The SEC found that a significant number of equity investments held in the funds had in fact not received ESG quality reviews before inclusion. The violation: the disclosure said one thing, the process did another.

Goldman Sachs Asset Management (November 2022, $4M): Goldman managed ESG-integrated mutual funds and separately managed accounts. Marketing materials described ESG factors as central to the investment process. The SEC found Goldman's ESG policy framework for the funds was not fully developed until 2020, meaning some investments made before that year did not go through the full ESG process the materials implied had been applied. The violation: the materials described a process that was not consistently in place during the period covered.

DWS (September 2023, $19M): DWS is Deutsche Bank's asset management arm. DWS marketing materials described "all assets under management" as ESG-integrated. DWS's own ESG integration policy, adopted in 2018, required portfolio managers to use a proprietary ESG score in investment decisions. The SEC found that the policy was not consistently followed: many DWS portfolio managers did not use the ESG score as described in the policy. The violation: the marketed claim was materially inconsistent with actual investment practice.

Financial charts and fund performance documents on a desk

The SEC cases against DWS, Goldman, and BNY Mellon each involved the same core violation: ESG disclosures to investors described an investment process that was not actually being followed in practice. Photo via Pexels. Pexels License.

The size of the penalties relative to AUM

The numbers are worth holding up: DWS manages roughly 900 billion euros in assets. Its penalty was $19 million. Goldman Asset Management manages over $2 trillion. Its penalty was $4 million. BNY Mellon Investment Adviser manages over $1.8 trillion. Its penalty was $1.5 million.

The penalties represent the following percentages of AUM: DWS, approximately 0.002%. Goldman, approximately 0.0002%. BNY Mellon, approximately 0.00008%.

These are not deterrents calibrated to the economic benefit of the greenwashing. ESG marketing commands fee premiums. Sustainable funds attracted significant inflows from investors seeking ESG exposure. The $24.5 million in total penalties is close to rounding error on the revenue generated by ESG marketing for firms this size.

Whether that's a policy failure or a calibration question for Congress to resolve is a separate debate. The numbers are what they are.

Legal documents and financial penalty notice on a desk

The SEC's three greenwashing settlements totaled approximately $24.5 million across firms managing over $4 trillion in combined assets. The penalties represent a fraction of one percent of AUM. Photo via Pexels. Pexels License.

The task force disbanding

The SEC Climate and ESG Task Force was a product of the Biden administration's regulatory agenda. The new administration's SEC leadership deprioritized climate and ESG enforcement as a matter of explicit policy. The task force's disbanding in early 2025 was part of a broader regulatory rollback that included the withdrawal of the SEC's climate disclosure rule (see SEC Climate Disclosure Rule Abandoned).

The three existing settlements are administrative orders and litigation releases. They do not disappear when the task force disbands. The legal precedents they establish remain: ESG claims to investors that materially misrepresent actual investment practices violate the Investment Advisers Act and the Investment Company Act.

What changes is prosecution posture: the current administration is unlikely to bring new ESG enforcement cases. Asset managers who continue to misrepresent ESG integration face reduced (though not zero) risk of federal enforcement.

Rows of blue solar panels mounted on grassy ground at solar energy station

Rows of blue solar panels mounted on grassy ground at solar energy station. Photo: Kelly via Pexels. Pexels License.. Pexels free to use.

State enforcement and the EU parallel

The SEC task force's disbanding doesn't mean ESG claims are now unenforceable. It means federal enforcement risk has declined. Other mechanisms remain.

New York's attorney general has broad securities fraud authority over investment advisers operating in the state, and New York has historically been the most active state in securities enforcement against asset managers. California's Department of Financial Protection and Innovation has comparable authority. Several state AGs have signaled willingness to bring greenwashing enforcement cases using state consumer-protection and securities laws that don't require the same federal mandate as the SEC task force.

Private plaintiff securities litigation under Rule 10b-5 is a separate channel. Any investor who purchased a fund based on ESG marketing claims that misrepresented the fund's investment process has a potential private right of action. The class action bar has been watching the DWS and Goldman settlements as roadmaps for private claims. Whether those claims survive the pleading standard under the Private Securities Litigation Reform Act depends on whether plaintiffs can adequately allege that they relied on specific misrepresentations that were material to their investment decision.

The European Union presents a parallel enforcement environment that affects multinational asset managers. The EU Sustainable Finance Disclosure Regulation, in force since 2021, imposes disclosure requirements on financial products marketed as sustainable in Europe. The European Securities and Markets Authority has been developing supervisory guidance on greenwashing that is explicitly broader than the SEC's framework. European enforcement actions under SFDR are beginning to emerge, and major asset managers with European operations face a regulatory environment that has not retreated the way the US environment has.

For the asset managers most implicated by the SEC cases, DWS operates primarily in Europe, Goldman has significant European asset management operations, and BNY Mellon's Dreyfus funds had European distribution. The SEC's enforcement window closed; the European window is opening.

The WokeCorp assessment

The commitment. Three major asset managers sold ESG products to investors, collected fees on ESG premiums, and failed to apply the ESG processes they described. This isn't alleged -- the companies paid the settlements, which effectively admit the violations.

The enforcement gap. The penalties are economically insignificant relative to the gains from ESG marketing. The task force was disbanded before bringing additional cases. The pattern: a brief, underpowered enforcement window that established legal principles without meaningful deterrence.

The residual risk. State securities regulators (particularly New York and California) have their own anti-fraud authority over asset managers. Private plaintiff securities fraud claims under Rule 10b-5 remain available. The SEC task force being disbanded does not mean greenwashing is no longer a legal risk -- it means federal enforcement risk has declined, while other mechanisms remain.

Sources

  • SEC v. DWS Investment Management Americas, Inc., Litigation Release No. 25760, September 25, 2023. Verified June 2026.
  • SEC v. Goldman Sachs Asset Management, L.P., Release No. IA-6189, November 22, 2022. Verified June 2026.
  • SEC v. BNY Mellon Investment Adviser, Inc., Release No. IA-6034, May 23, 2022. Verified June 2026.
  • SEC Climate and ESG Task Force announcement, March 4, 2021. Verified June 2026.