Let’s not dance around it. Neuberger Berman Group LLC, that buffed-up asset manager that likes to pose as a sober, responsible steward of capital, is exactly what you get when you scrub the smell off Wall Street but leave the meat to rot. Founded in 1939, spun out of the Lehman wreckage in 2009, now running north of $400 billion for governments, pensions and the usual “sophisticated” money – and underneath it all, a history of regulatory slaps, ERISA suits, arbitration losses and ethical stains you could see from space.

At TCAP – The Cummins Accountability Project – we track the money that keeps heavy polluters walking tall. Neuberger is not some neutral middleman in that story. It has just cranked up its bet on Cummins Inc, the diesel engine specialist that had to pay a record environmental penalty for cheating on emissions. When you follow the filings and the enforcement actions side by side, the picture is simple. Neuberger isn’t just investing in industrial risk. It is marinating in the same dirty logic: overcharge, under-disclose, let someone else pick up the tab.

The Cummins Connection – ESG On The Brochure, Diesel In The Portfolio

Start with the fresh one. A few days ago, Neuberger Berman quietly told the US Securities and Exchange Commission that it had boosted its stake in Cummins Inc by 19.7 per cent. It added 98,901 shares to land on 600,076 in total, worth about $196.5 million at the time of the filing – roughly 0.44 per cent of the company. That is not a rounding error. That is conviction.

The same firm publishes “sustainable exclusion” policies and hand-wringing PDFs about controversial weapons and responsible investing. Out the front door: no cluster bombs. Round the back: hundreds of millions parked in a diesel manufacturer that just wrote a cheque for the biggest Clean Air Act civil penalty in US history after regulators caught it cheating emissions on hundreds of thousands of Ram trucks.

Cummins did the usual modern confession routine. No admission of liability, just a “settlement” north of $2 billion once you add the civil penalty and required fixes. Software designed so engines behave in the test cell, then cough more filth once they hit the road. Recalls, retrofits, paperwork that quietly admits what the press releases deny.

Neuberger looked at that and decided the right move was to buy more. That is not passive. That is an endorsement. When you see a supposedly ESG-aware manager double down on a company fresh from a record environmental fine, you are not looking at stewardship. You are looking at a firm that treats climate risk as a line in a marketing deck and diesel fraud as a buying opportunity.

Overcharging The Funds – Expenses That Always Seemed To Point Their Way

The official record already shows what Neuberger does when it thinks nobody is looking. In 2018, its private equity arm NB Alternatives Advisers was nailed by the SEC for misallocating compensation expenses. Staff split time between fund work and other business, but Neuberger allegedly dumped the full cost into the funds anyway. Clients paid the whole bill. The firm kept the benefit.

The order forced them to cough up roughly $2.36 million in disgorgement and interest, plus a civil penalty that took the total close to $2.7 million. Classic settlement language: no admission, no denial, just a cheque and a promise to behave. The SEC politely called it “negligent” breaches of antifraud provisions. Translated: if you or I tried this with client money, it would be called something much uglier.

Then there was the Dyal Capital episode – another round of regulatory attention over improper expenses pushed onto funds tied to a Neuberger affiliate. More settlements, more carefully worded non-apologies.

This is the pattern. In public, Neuberger sells itself as a trusted adviser to institutions and sovereigns. In the enforcement files, you see a shop that has already been caught blurring the line between “client costs” and “our problem”. If you are a pension fund relying on them to guard every basis point, that should make your skin crawl.

Fleecing Their Own – 401(k) Self-Dealing And ERISA Trouble

If this is how they treat external capital, imagine what happens to their own staff. You do not have to imagine. The Bekker v Neuberger Berman Group LLC case put it in black and white.

Employees alleged that Neuberger stuffed their 401(k) plan with in-house funds that charged higher fees and delivered weaker returns than basic alternatives. Shiny proprietary products pushed into the line-up while cheaper index options sat on the sidelines. The lawsuit claimed this self-dealing breached ERISA fiduciary duties and cost workers serious money.

Instead of rolling the dice in court, Neuberger agreed in 2020 to pay $17 million to settle. Standard script again – no admission of liability. But you do not write a seventeen-million-dollar cheque over a misunderstanding.

The message to employees was clear enough. This is a firm that will happily put its own fee streams ahead of staff retirement outcomes, then bury the result in legalese. When the people running your pension behave like that, “alignment” is a sick joke.

Whispers, Probes And Arbitration – The Lehman Smell Never Really Left

Neuberger likes to trade on its independence post-Lehman, as if being bought out of the wreckage by its employees washed the past away. The record suggests otherwise.

In 2011, analyst Fayad Abbasi was put on leave after his name surfaced in testimony during the insider trading trial around James Fleishman and Primary Global Research. No charges were brought against Abbasi or Neuberger, but the firm’s research pipeline was suddenly sitting in the shadow of a big US probe into hedge fund information flows. Even if nothing stuck, it showed how close to the wire their “edge” might have been running.

The same year, Neuberger was ordered in a FINRA arbitration to pay millions – reports put the award in the low- to mid-single digit millions – to investors who said they were misled over Lehman-linked products. It was one more echo of the bank that once owned them: complex structures, angry clients, and a quiet payout to stop the bleeding.

None of this on its own makes Neuberger uniquely evil. But put together with everything else, it paints the picture of a business that drifts into trouble, pays to make it go away, then carries on as if the slate is clean.

Governance, Gaza And A Brand That Keeps Tripping Over Itself

Fast forward to 2024 and the rot surfaces in a different way. Portfolio manager Steve Eisman – yes, the “Big Short” guy – gets put on leave after posting on social media in a way that was widely read as celebrating violence in Gaza. With tens of thousands reported dead, it was more than a bad take. Neuberger called the post “objectionable” and Eisman admitted it was “irresponsible”.

On one level it is a PR mess. On another, it is a glimpse into the culture. This is a firm that will lecture the world on ESG and social responsibility while its star names fire off comments that blow up in the faces of every client with a conscience clause in their mandate.

Overlay that with the constant wave of impersonation scams – cloned Neuberger Berman “entities”, fake apps, fake sites – serious enough that they have had to issue repeated public scam alerts. The scams are not their fault, but they expose something else: a brand so big, so generic, so fee-rich that fraudsters see it as an easy costume. And a firm that, for all its talk about risk management, still cannot fully choke off the confusion.

Add in the lingering questions that swirl around anyone touched by the Lehman era, the occasional need for internal “reviews” when awkward names and scandals pop up, and you start to see how fragile the clean story really is.

Hypocrisy As A Service – ESG Rhetoric, Diesel Reality

Neuberger has policies that proudly bar investments in “controversial weapons”. It waves around sustainable exclusion lists and ESG integration frameworks. All very earnest. All very 2020s.

Then you look at where the money actually goes.

Into Cummins, post-emissions-cheating, post-record environmental fine.
Into financing structures that help private equity buyout shops lever companies to the hilt.
Into a portfolio where “engagement” can be spun to justify almost anything, as long as the fees keep flowing.

There is a particular kind of corporate cowardice here. They will draw lines at cluster munitions – low-hanging fruit – while funding a company whose diesel engines have helped choke cities for decades and just got caught gaming the basic rules that try to keep the air breathable. They will market “sustainable” funds while sitting on top of a platform that has already been sanctioned for overcharging expenses and sued for gutting its own staff pension plan.

It is not just hypocrisy. It is hypocrisy industrialised, packaged, and sold as a feature.

Why This Matters For Cummins – And For Everyone Else

For Cummins, having investors like Neuberger on the register is a blessing. It means there is always a well-dressed grown-up ready to nod along when management talks about “moving forward” from emissions scandals and “transitioning” to cleaner tech while the diesel cash cow keeps mooing in the background.

For Neuberger’s clients, it is another story. Governments and pension funds who think they are buying clean, well-governed exposure are actually renting a seat on a bus driven by people who have already:

misallocated expenses in private equity funds
been hauled into court over ERISA breaches and paid to shut it down
faced multi-million arbitration awards over mis-sold products
stumbled into high-profile reputational messes

And for the rest of us, it is a reminder of how the system is wired. You can sue Volkswagen over emissions lies one year and back Cummins the next. You can sign up to the Principles for Responsible Investment while quietly buying into the same old fossil-heavy names. You can talk stewardship while your own employees drag you to court for stuffing their retirements with overpriced house funds.

None of this is an accident. It is the business model.

Neuberger Berman is not some rogue outlier. It is a near-perfect expression of the modern asset manager: polished marketing, ESG wallpaper, diesel in the portfolio and a filing cabinet full of settlements and “neither admit nor deny” orders.

So when you see their name next to Cummins on the shareholder list, do not kid yourself this is capital pushing for a better future. It is just another pair of hands on the same wheel, steering towards the same cliff, hoping to jump out with a bonus before the impact.

Investors, regulators, and anyone stuck breathing the consequences deserve to see that clearly.

Shareholder Spotlight : Unmasking Neuberger Berman – The Dirty Secrets of a Wall Street Giant