BNY Mellon Fined $1.5 Million for Misstatements

The Securities and Exchange Commission charged BNY Mellon Investment Adviser, Inc. with making false statements and omissions about environmental, social, and governance (ESG) factors when making investment decisions for mutual funds it managed. BNY Mellon Investment Adviser agreed to pay a $1.5 million penalty to settle the charges.

According to the SEC's decision, BNY Mellon Investment Adviser stated or indicated in numerous statements from July 2018 to September 2021 that all investments in the funds had completed an ESG quality review, even though this was not always the case. Many investments owned by certain funds did not have an ESG quality review score at the time of investment.

Sanjay Wadhwa, Deputy Director of the SEC’s Division of Enforcement and head of its Climate and ESG Task Force, said:

"Registered investment advisers and funds are increasingly offering and evaluating investments that employ ESG strategies or incorporate certain ESG criteria, in part to meet investor demand for such strategies and investments."

“Here, our order finds that BNY Mellon Investment Adviser did not always perform the ESG quality review that it disclosed using as part of its investment selection process for certain mutual funds it advised."

Adam S. Aderton, Co-Chief of the SEC Enforcement Division’s Asset Management Unit and a member of the Task Force, said:

"Investors are increasingly focused on ESG considerations when making investment decisions. As this action illustrates, the Commission will hold investment advisers accountable when they do not accurately describe their incorporation of ESG factors into their investment selection process."

The Climate and ESG Task Force was established in March 2021 to examine disclosure and compliance problems linked to investment advisers' and funds' ESG initiatives.

Source: SEC