BNY Mellon pays $6.6 million to resolve SEC charges
[JURIST] The Bank of New York Mellon Corp. [corporate website] agreed to pay $6.6 million to resolve charges [press release; SEC order] from the Securities and Exchange Commission (SEC) [official website] on Thursday. The civil chargers were filed after the bank miscalculated its risk-based capital ratio. The SEC claims [Reuters report] that BNY Mellon excluded approximately $14 billion in collateralized loan obligation assets from its calculations. An SEC investigation found that the miscalculation caused BNY Mellon to understate its risk-weight assets and overstate some of its risk-based capital ratios in quarterly and annual reports from 2010 to 2014. This caused serious concern about the ability of investors to receive accurate and timely information as “regulatory capital ratios and risk-weighted assets are critical data points for investors in large banking institutions like BNY Mellon,” according to Michael Osnato, Chief of SEC Enforcement Division’s Complex Financial Instruments Unit. BNY Mellon is not admitting or denying the charges in its settlement.
In 2008 the SEC investigated [JURIST report] BNY Mellon over potential breaches of procedure in auction-rate securities sales and purchases. Also in 2008, Russia pursued a racketeering lawsuit [JURIST report] against BNY Mellon. In November 2005 BNY Mellon agreed [JURIST report] to pay $38 million in fines in order to avoid US prosecution related to the scandal.