SEC Fines BNY Mellon Over ESG Claims

The SEC charged BNY Mellon Investment Adviser, Inc. for alleged misstatements and omissions in their ESG reporting of some funds that it managed.

BNY Mellon has agreed to pay a $1.5m penalty to settle this charge, which is the first of its kind from the SEC.

The SEC found that BNY Mellon Investment Adviser represented or implied in various statements that all investments in the funds had undergone an ESG review, even though this was not always the case. In fact, a significant number of investments held by certain funds did not have an ESG quality review score as of the time of investment.

The full SEC write up is here.

Although the SEC is expected to further scrutinise the substance of “ESG” claims in the future, the focus of this particular charge relates to policy adherence and compliance rather than an assessment of the policy itself.

This is a good reminder of the importance of operating in line with your policy.

If you would like to know more, or would like some help aligning your processes and policy, please contact us.