Assets Under Management
Quarterly points use the latest ADV filing or SEC roster snapshot available in each quarter.
Total AUM$8.4B
Total Accounts3,732
10Y AUM Change+$7.1B (+539.7%)
Employee Growth by Quarter
Quarterly points use the latest ADV filing or SEC roster snapshot available in each quarter.
Total Employees253
Clients per Employee15:1
10Y Employee Change-151 (-37.4%)
Historical AUM and employee figures reflect available SEC Form ADV filings under this CRD. Filing gaps may reflect registration status changes, dormant periods, state registration periods, firm restructuring, or other reporting changes. Rialytix does not interpolate missing periods.
Private Funds
Private funds reported by Bny Mellon Securities Corporation
Loading private fund disclosures…
Custodians
Reported custodian relationships by Bny Mellon Securities Corporation
- PERSHING LLC
$5,412,885,508
- MORGAN STANLEY
$1,809,059,441
These custodians are disclosed for separately managed accounts under Form ADV’s 10% reporting threshold. This is not a complete list of custodians for all client assets.
Ownership
Reported direct and indirect relationships by Bny Mellon Securities Corporation
Each range applies to a separate reported relationship and should not be added together.
Reported ownership ranges
Highlighted bands show the percentage range reported in Form ADV.
0%25%50%75%100%
BNY MELLON INVESTMENT ADVISER, INC.Direct owner · Schedule AInterest in BNY MELLON SECURITIES CORPORATION
75%+
THE BANK OF NEW YORK MELLON CORPORATIONIndirect owner · Schedule BInterest in MBC INVESTMENT CORPORATION
75%+
MBC INVESTMENT CORPORATIONIndirect owner · Schedule BInterest in BNY MELLON INVESTMENT ADVISER, INC.
75%+
BNY MELLON IHC, LLCIndirect owner · Schedule BInterest in THE BANK OF NEW YORK MELLON CORPORATION
75%+
Bars represent the reported range at that individual ownership step, not an estimated percentage of the advisory firm. Indirect relationships may refer to intermediate entities rather than directly to Bny Mellon Securities Corporation.
Reported ownership and control details
12 entries
Reported ownership and control details
Compliance & Disclosures
Responses were selected by the RIA in its filing. Questions are shortened for readability; “you” refers to the reporting firm, and some questions also cover advisory affiliates.
RIA or supervised-person involvementThe RIA reported that one or more events below involve the firm or its supervised persons.RIA responseYes
AFelonies2 No
In the past ten years, have you or any advisory affiliate:
- A1Been convicted of or pleaded guilty or no contest to a felony?No
- A2Been charged with a felony?No
BMisdemeanors2 No
In the past ten years, have you or any advisory affiliate:
- B1Been convicted of or pleaded guilty or no contest to a misdemeanor involving investments, an investment-related business, fraud, false statements or omissions, wrongful taking of property, bribery, perjury, forgery, counterfeiting, or extortion?No
- B2Been charged with a misdemeanor of the kind listed above?No
CSEC or CFTC actions4 Yes1 No
Has the SEC or CFTC ever:
- C1Found you or an advisory affiliate made a false statement or omission?Yes
- C2Found you or an advisory affiliate violated SEC or CFTC regulations or statutes?Yes
- C3Found you or an advisory affiliate caused an investment-related business to have its authorization to do business denied, suspended, revoked, or restricted?No
- C4Entered an order against you or an advisory affiliate in connection with investment-related activity?Yes
- C5Imposed a civil money penalty on you or an advisory affiliate, or ordered you or an advisory affiliate to cease and desist from any activity?Yes
DOther regulatory actions2 Yes3 No
Has any other federal regulatory agency, state regulatory agency, or foreign financial regulatory authority ever:
- D1Found you or an advisory affiliate made a false statement or omission, or was dishonest, unfair, or unethical?No
- D2Found you or an advisory affiliate violated investment-related regulations or statutes?Yes
- D3Found you or an advisory affiliate caused an investment-related business to have its authorization to do business denied, suspended, revoked, or restricted?No
- D4In the past ten years, entered an order against you or an advisory affiliate in connection with investment-related activity?Yes
- D5Denied, suspended, or revoked your or an advisory affiliate’s registration or license, or otherwise prevented association with an investment-related business or restricted activities?No
ESelf-regulatory organization actions1 Yes3 No
Has a self-regulatory organization or commodities exchange ever:
- E1Found you or an advisory affiliate made a false statement or omission?No
- E2Found you or an advisory affiliate violated its rules, other than a violation designated as a minor rule violation under an SEC-approved plan?Yes
- E3Found you or an advisory affiliate caused an investment-related business to have its authorization to do business denied, suspended, revoked, or restricted?No
- E4Disciplined you or an advisory affiliate by expulsion, suspension, barring association with other members, or otherwise restricting activities?No
FProfessional authorizations1 No
- FHas an authorization to act as an attorney, accountant, or federal contractor granted to you or an advisory affiliate ever been revoked or suspended?No
GPending regulatory proceedings1 No
- GAre you or any advisory affiliate now the subject of a regulatory proceeding that could result in a “Yes” answer to any part of C, D, or E?No
HCivil judicial actions and proceedings3 Yes1 No
(1) Court actions
Has a domestic or foreign court:
- H(1)(a)In the past ten years, enjoined you or an advisory affiliate in connection with investment-related activity?Yes
- H(1)(b)Found that you or an advisory affiliate violated investment-related statutes or regulations?Yes
- H(1)(c)Dismissed, pursuant to a settlement agreement, an investment-related civil action brought against you or an advisory affiliate by a state or foreign financial regulatory authority?Yes
(2) Pending civil proceedings
- H(2)Are you or any advisory affiliate now the subject of a civil proceeding that could result in a “Yes” answer to any part of H(1)?No
Additional DRP filings 13 source blocks
Verbatim excerpts from supporting DRP filings, which may concern the firm or advisory affiliates. Amounts retain their filed labels; no total or attribution is inferred.
regulatory · block 1THE BANK OF NEW YORK MELLON CORPORATIONPDF pages 75–77
- Advisory affiliate name — filed text
- THE BANK OF NEW YORK MELLON CORPORATION
- Regulator name — filed text
- U.S. SECURITIES AND EXCHANGE COMMISSION
- Monetary/Fine Amount — filed text
- $ 6,600,000.00
- How was matter resolved — filed text
- Order
Action status / disposition — filed text
THIS ACTION ARISES OUT OF THE SEC'S ASSERTION THAT BNY MELLON FAILED TO PROPERLY INCLUDE APPROXIMATELY $14 BILLION OF CERTAIN ASSETS OF VARIABLE INTEREST ENTITIES (THE "VIES") IN ITS CALCULATION OF RISK-BASED REGULATORY CAPITAL RATIOS PRESENTED IN ANNUAL AND QUARTERLY REPORTS FILED WITH THE SEC. BEGINNING IN THE THIRD QUARTER OF 2010, THE SEC FOUND THAT BNY MELLON WAS REQUIRED TO CONSOLIDATE THE ACCOUNTS OF CERTAIN VIES - WHICH TOOK THE FORM OF COLLATERALIZED LOAN OBLIGATIONS ("CLOS") - ONTO ITS BALANCE SHEET PURSUANT TO APPLICABLE GUIDANCE ISSUED BY THE FINANCIAL ACCOUNTING STANDARDS BOARD IN JUNE 2009 (NOW CODIFIED IN ASC 810). AS A RESULT OF ASC 810, IT WAS DETERMINED THAT RISK-BASED CAPITAL RULES REQUIRED BNY MELLON TO INCLUDE THE ASSETS OF THESE VIES IN ITS RISK-WEIGHTED ASSETS FOR PURPOSES OF CALCULATING ITS REGULATORY CAPITAL RATIOS. AS THE SEC ORDER RELATES, BNY MELLON, HOWEVER, DEVIATED FROM THE REGULATORY CAPITAL RULES WITHOUT THE NECESSARY AUTHORIZATION FROM THE FEDERAL RESERVE BOARD AND EXCLUDED THESE ASSETS FROM ITS REGULATORY CAPITAL RATIOS AFTER MAKING A DETERMINATION THAT THE VIES DID NOT POSE A RISK TO THE FIRM. THE SEC FOUND THAT (1) BNY MELLON'S EXCLUSION OF THE VIES CAUSED THE FIRM TO MISREPORT ITS RISK-BASED REGULATORY CAPITAL RATIOS IN EACH OF ITS QUARTERLY AND ANNUAL REPORTS FROM THE THIRD QUARTER OF 2010 THROUGH THE FIRST QUARTER OF 2014, (2) THROUGHOUT THIS TIME PERIOD, BNY MELLON FAILED TO MAKE AND KEEP ACCURATE BOOKS AND RECORDS WITH RESPECT TO ITS RISK-WEIGHTED ASSETS AND REGULATORY CAPITAL RATIOS, AND (3) BNY MELLON ALSO FAILED TO DEVISE AND MAINTAIN A SYSTEM OF INTERNAL REGULATORY ACCOUNTING CONTROLS SUFFICIENT TO PROVIDE REASONABLE ASSURANCES THAT ITS FINANCIAL STATEMENTS WERE PREPARED IN CONFORMITY WITH APPLICABLE CRITERIA. ON JANUARY 12, 2017, THE SEC ANNOUNCED THAT IT HAD ENTERED INTO AN ADMINISTRATIVE SETTLEMENT ON A NEITHER-ADMIT-NOR-DENY BASIS WITH BNY MELLON IN WHICH BNY MELLON AGREED TO PAY $6.6 MILLION.
Other filed details
Description of allegations — filed text
THE SEC STAFF ALLEGED VIOLATIONS OF SECTIONS 13(B)(2)(A) & (B) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR BOOKS AND RECORDS AND INTERNAL REGULATORY ACCOUNTING CONTROL DEFICIENCIES IN CONNECTION WITH THE CALCULATION OF RISK-BASED REGULATORY CAPITAL RATIOS PRESENTED IN ANNUAL AND QUARTERLY REPORTS FILED WITH THE SEC.
Sanction detail — filed text
A CIVIL MONEY PENALTY IN THE AMOUNT OF $6,600,000. BNY MELLON WILL EFFECT PAYMENT ON A DATE TBD.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of
Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution
Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives
rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
CRD
Number:
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
THE BANK OF NEW YORK MELLON
CORPORATION
(For individuals, Last, First, Middle)
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for
registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event
occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years
ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the
event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
U.S. SECURITIES AND EXCHANGE COMMISSION
2.
Principal Sanction:
Cease and Desist
Other Sanctions:
CIVIL MONETARY PENALTY
3.
Date Initiated (MM/DD/YYYY):
01/12/2017
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
SEC RELEASE NO. 34-79777; ADMINISTRATIVE PROCEEDING FILE NO. 3-17768
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
NOT APPLICABLE
6.
Principal Product Type:
No Product
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
THE SEC STAFF ALLEGED VIOLATIONS OF SECTIONS 13(B)(2)(A) & (B) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR BOOKS AND RECORDS AND INTERNAL REGULATORY
ACCOUNTING CONTROL DEFICIENCIES IN CONNECTION WITH THE CALCULATION OF RISK-BASED REGULATORY CAPITAL RATIOS PRESENTED IN ANNUAL AND QUARTERLY
REPORTS FILED WITH THE SEC.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Order
11. Resolution Date (MM/DD/YYYY):
01/12/2017
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 6,600,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
NOT APPLICABLE
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal,
etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition
has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an
advisory affiliate, date paid and if any portion of penalty was waived:
A CIVIL MONEY PENALTY IN THE AMOUNT OF $6,600,000. BNY MELLON WILL EFFECT PAYMENT ON A DATE TBD.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space
provided).
THIS ACTION ARISES OUT OF THE SEC'S ASSERTION THAT BNY MELLON FAILED TO PROPERLY INCLUDE APPROXIMATELY $14 BILLION OF CERTAIN ASSETS OF VARIABLE
INTEREST ENTITIES (THE "VIES") IN ITS CALCULATION OF RISK-BASED REGULATORY CAPITAL RATIOS PRESENTED IN ANNUAL AND QUARTERLY REPORTS FILED WITH THE SEC.
BEGINNING IN THE THIRD QUARTER OF 2010, THE SEC FOUND THAT BNY MELLON WAS REQUIRED TO CONSOLIDATE THE ACCOUNTS OF CERTAIN VIES - WHICH TOOK THE FORM
OF COLLATERALIZED LOAN OBLIGATIONS ("CLOS") - ONTO ITS BALANCE SHEET PURSUANT TO APPLICABLE GUIDANCE ISSUED BY THE FINANCIAL ACCOUNTING STANDARDS
BOARD IN JUNE 2009 (NOW CODIFIED IN ASC 810). AS A RESULT OF ASC 810, IT WAS DETERMINED THAT RISK-BASED CAPITAL RULES REQUIRED BNY MELLON TO INCLUDE THE
ASSETS OF THESE VIES IN ITS RISK-WEIGHTED ASSETS FOR PURPOSES OF CALCULATING ITS REGULATORY CAPITAL RATIOS. AS THE SEC ORDER RELATES, BNY MELLON,
HOWEVER, DEVIATED FROM THE REGULATORY CAPITAL RULES WITHOUT THE NECESSARY AUTHORIZATION FROM THE FEDERAL RESERVE BOARD AND EXCLUDED THESE ASSETS
FROM ITS REGULATORY CAPITAL RATIOS AFTER MAKING A DETERMINATION THAT THE VIES DID NOT POSE A RISK TO THE FIRM. THE SEC FOUND THAT (1) BNY MELLON'S
EXCLUSION OF THE VIES CAUSED THE FIRM TO MISREPORT ITS RISK-BASED REGULATORY CAPITAL RATIOS IN EACH OF ITS QUARTERLY AND ANNUAL REPORTS FROM THE THIRD
QUARTER OF 2010 THROUGH THE FIRST QUARTER OF 2014, (2) THROUGHOUT THIS TIME PERIOD, BNY MELLON FAILED TO MAKE AND KEEP ACCURATE BOOKS AND RECORDS
WITH RESPECT TO ITS RISK-WEIGHTED ASSETS AND REGULATORY CAPITAL RATIOS, AND (3) BNY MELLON ALSO FAILED TO DEVISE AND MAINTAIN A SYSTEM OF INTERNAL
REGULATORY ACCOUNTING CONTROLS SUFFICIENT TO PROVIDE REASONABLE ASSURANCES THAT ITS FINANCIAL STATEMENTS WERE PREPARED IN CONFORMITY WITH
APPLICABLE CRITERIA. ON JANUARY 12, 2017, THE SEC ANNOUNCED THAT IT HAD ENTERED INTO AN ADMINISTRATIVE SETTLEMENT ON A NEITHER-ADMIT-NOR-DENY BASIS WITH
BNY MELLON IN WHICH BNY MELLON AGREED TO PAY $6.6 MILLION.regulatory · block 2THE BANK OF NEW YORK MELLON CORPORATIONPDF pages 77–79
- Advisory affiliate name — filed text
- THE BANK OF NEW YORK MELLON CORPORATION
- Regulator name — filed text
- FEDERAL RESERVE BANK OF NEW YORK AND BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM (COLLECTIVELY, "FEDERAL RESERVE")
- Monetary/Fine Amount — filed text
- $ 3,000,000.00
- How was matter resolved — filed text
- Consent
Action status / disposition — filed text
THIS ACTION ARISES OUT OF THE FEDERAL RESERVE'S ASSERTION THAT BNY MELLON FAILED TO PROPERLY INCLUDE APPROXIMATELY $14 BILLION OF CERTAIN ASSETS OF VARIABLE INTEREST ENTITIES (THE "VIES") IN ITS CALCULATION OF ITS RISK-BASED REGULATORY CAPITAL RATIOS. BEGINNING IN THE THIRD QUARTER OF 2010, THE FEDERAL RESERVE FOUND THAT BNY MELLON ACCOUNTED FOR THESE VIE ASSETS IN ITS "TRADING BOOK," WHEREIN IT ASSIGNED THE ASSETS A ZERO-RISK WEIGHTING UNDER A VALUE-AT-RISK MODEL. IT WAS DETERMINED THAT BNY MELLON'S REGULATORY ACCOUNTING TREATMENT OF THE VIE ASSETS WAS IMPROPER UNDER THEN-APPLICABLE BASEL I REGULATORY RISK CAPITAL RULES. AS THE FEDERAL RESERVE CONSENT ORDER RELATES, BNY MELLON DEVIATED FROM THE REGULATORY CAPITAL RULES WITHOUT THE NECESSARY AUTHORIZATION FROM THE FEDERAL RESERVE AND EXCLUDED THESE ASSETS FROM ITS REGULATORY CAPITAL RATIOS FOR NEARLY 14 QUARTERS, RESULTING IN BNY MELLON UNDERSTATING ITS RISK-WEIGHTED ASSETS AND OVERSTATING ITS RISK-BASED CAPITAL RATIOS. THE FEDERAL RESERVE FOUND THAT THIS CONDUCT REPRESENTS OR RESULTED IN UNSAFE OR UNSOUND PRACTICES, AND A VIOLATION OF REGULATION Y OF THE BOARD OF GOVERNORS (12 C.F.R. § 225). ON JUNE 26, 2017, THE FEDERAL RESERVE ANNOUNCED THAT IT HAD ASSESSED BNY MELLON A CIVIL MONETARY PENALTY IN THE AMOUNT OF $3 MILLION.
Other filed details
Description of allegations — filed text
THE FEDERAL RESERVE ALLEGED VIOLATIONS OF REGULATION Y OF THE BOARD OF GOVERNORS (12 C.F.R. § 225) FOR ITS REGULATORY ACCOUNTING TREATMENT OF CERTAIN ASSETS OF VARIABLE INTEREST ENTITIES (THE "VIES").
Sanction detail — filed text
A CIVIL MONEY PENALTY IN THE AMOUNT OF $3,000,000. BNY MELLON EFFECTED PAYMENT ON OR ABOUT JUNE 27, 2017.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE CRD Number: This advisory affiliate is a Firm an Individual Registered: Yes No Name: THE BANK OF NEW YORK MELLON CORPORATION (For individuals, Last, First, Middle) This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FEDERAL RESERVE BANK OF NEW YORK AND BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM (COLLECTIVELY, "FEDERAL RESERVE") 2. Principal Sanction: Civil and Administrative Penalt(ies) /Fine(s) Other Sanctions: NOT APPLICABLE 3. Date Initiated (MM/DD/YYYY): 06/26/2017 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: DOCKET NO. 17-016-CMP-HC 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): NOT APPLICABLE 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): THE FEDERAL RESERVE ALLEGED VIOLATIONS OF REGULATION Y OF THE BOARD OF GOVERNORS (12 C.F.R. § 225) FOR ITS REGULATORY ACCOUNTING TREATMENT OF CERTAIN ASSETS OF VARIABLE INTEREST ENTITIES (THE "VIES"). 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Consent 11. Resolution Date (MM/DD/YYYY): 06/26/2017 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ 3,000,000.00 Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: NOT APPLICABLE Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: A CIVIL MONEY PENALTY IN THE AMOUNT OF $3,000,000. BNY MELLON EFFECTED PAYMENT ON OR ABOUT JUNE 27, 2017. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). THIS ACTION ARISES OUT OF THE FEDERAL RESERVE'S ASSERTION THAT BNY MELLON FAILED TO PROPERLY INCLUDE APPROXIMATELY $14 BILLION OF CERTAIN ASSETS OF VARIABLE INTEREST ENTITIES (THE "VIES") IN ITS CALCULATION OF ITS RISK-BASED REGULATORY CAPITAL RATIOS. BEGINNING IN THE THIRD QUARTER OF 2010, THE FEDERAL RESERVE FOUND THAT BNY MELLON ACCOUNTED FOR THESE VIE ASSETS IN ITS "TRADING BOOK," WHEREIN IT ASSIGNED THE ASSETS A ZERO-RISK WEIGHTING UNDER A VALUE-AT-RISK MODEL. IT WAS DETERMINED THAT BNY MELLON'S REGULATORY ACCOUNTING TREATMENT OF THE VIE ASSETS WAS IMPROPER UNDER THEN-APPLICABLE BASEL I REGULATORY RISK CAPITAL RULES. AS THE FEDERAL RESERVE CONSENT ORDER RELATES, BNY MELLON DEVIATED FROM THE REGULATORY CAPITAL RULES WITHOUT THE NECESSARY AUTHORIZATION FROM THE FEDERAL RESERVE AND EXCLUDED THESE ASSETS FROM ITS REGULATORY CAPITAL RATIOS FOR NEARLY 14 QUARTERS, RESULTING IN BNY MELLON UNDERSTATING ITS RISK-WEIGHTED ASSETS AND OVERSTATING ITS RISK-BASED CAPITAL RATIOS. THE FEDERAL RESERVE FOUND THAT THIS CONDUCT REPRESENTS OR RESULTED IN UNSAFE OR UNSOUND PRACTICES, AND A VIOLATION OF REGULATION Y OF THE BOARD OF GOVERNORS (12 C.F.R. § 225). ON JUNE 26, 2017, THE FEDERAL RESERVE ANNOUNCED THAT IT HAD ASSESSED BNY MELLON A CIVIL MONETARY PENALTY IN THE AMOUNT OF $3 MILLION.
regulatory · block 3THE BANK OF NEW YORK MELLON CORPORATIONPDF pages 79–81
- Advisory affiliate name — filed text
- THE BANK OF NEW YORK MELLON CORPORATION
- Regulator name — filed text
- U.K. FINANCIAL CONDUCT AUTHORITY
- How was matter resolved — filed text
- Order
Action status / disposition — filed text
THE FCA ISSUED THEIR DECISION ON 21 FEBRUARY 2019. THE FCA WILL PUBLISH A NON-CONFIDENTIAL VERSION OF ITS DECISION UNDER THE COMPETITION ACT 1998 IN DUE COURSE.
Other filed details
Description of allegations — filed text
ON 21 FEBRUARY 2019, THE UK FINANCIAL CONDUCT AUTHORITY ("FCA") FOUND THAT NEWTON INVESTMENT MANAGEMENT LIMITED ("NIM"), THROUGH THE ACTIONS OF A FORMER EMPLOYEE IN 2014 AND 2015, SHARED INFORMATION WITH THREE OTHER UK INVESTMENT ADVISERS IN RELATION TO TWO INITIAL PUBLIC OFFERINGS AND ONE PLACING BY UK ISSUERS BY DISCLOSING THE PRICE IT INTENDED TO PAY, OR ACCEPTING SUCH INFORMATION, OR BOTH, SHORTLY BEFORE THE SHARE PRICES WERE SET. THE FCA FOUND THAT PARTS OF THIS CONDUCT VIOLATED THE UK COMPETITION ACT 1998. NIM SELF-REPORTED THIS MATTER TO THE FCA FOLLOWING IDENTIFICATION OF THE ISSUE. THE FORMER EMPLOYEE'S ACTIONS CONTRAVENED NIM'S CODE OF CONDUCT AND ETHICAL STANDARDS, AND THE EMPLOYEE HAS SINCE BEEN DISMISSED. THE BANK OF NEW YORK MELLON CORPORATION ("BNYM") WAS FOUND JOINTLY AND SEVERALLY LIABLE BY REASON OF BEING NIM'S ULTIMATE PARENT COMPANY. NEITHER BNYM NOR ANY OF ITS EMPLOYEES WAS INVOLVED IN ANY ASPECT OF THE RELEVANT CONDUCT AND THERE HAS BEEN NO ALLEGATION NOR NEGATIVE FINDING BY THE FCA IN RESPECT OF THE CONDUCT OF BNYM.
Sanction detail — filed text
NOT APPLICABLE
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of
Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution
Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives
rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
CRD
Number:
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
THE BANK OF NEW YORK MELLON
CORPORATION
(For individuals, Last, First, Middle)
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for
registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event
occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years
ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the
event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
U.K. FINANCIAL CONDUCT AUTHORITY
2.
Principal Sanction:
Other
Other Sanctions:
NO SANCTIONS WERE IMPOSED
3.
Date Initiated (MM/DD/YYYY):
11/29/2017
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
CMP/01-2016/CA98
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
NOT APPLICABLE
6.
Principal Product Type:
Equity Listed (Common & Preferred Stock)
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
ON 21 FEBRUARY 2019, THE UK FINANCIAL CONDUCT AUTHORITY ("FCA") FOUND THAT NEWTON INVESTMENT MANAGEMENT LIMITED ("NIM"), THROUGH THE ACTIONS OF A
FORMER EMPLOYEE IN 2014 AND 2015, SHARED INFORMATION WITH THREE OTHER UK INVESTMENT ADVISERS IN RELATION TO TWO INITIAL PUBLIC OFFERINGS AND ONE
PLACING BY UK ISSUERS BY DISCLOSING THE PRICE IT INTENDED TO PAY, OR ACCEPTING SUCH INFORMATION, OR BOTH, SHORTLY BEFORE THE SHARE PRICES WERE SET. THE
FCA FOUND THAT PARTS OF THIS CONDUCT VIOLATED THE UK COMPETITION ACT 1998. NIM SELF-REPORTED THIS MATTER TO THE FCA FOLLOWING IDENTIFICATION OF THE
ISSUE. THE FORMER EMPLOYEE'S ACTIONS CONTRAVENED NIM'S CODE OF CONDUCT AND ETHICAL STANDARDS, AND THE EMPLOYEE HAS SINCE BEEN DISMISSED. THE BANK OF
NEW YORK MELLON CORPORATION ("BNYM") WAS FOUND JOINTLY AND SEVERALLY LIABLE BY REASON OF BEING NIM'S ULTIMATE PARENT COMPANY. NEITHER BNYM NOR ANY OF
ITS EMPLOYEES WAS INVOLVED IN ANY ASPECT OF THE RELEVANT CONDUCT AND THERE HAS BEEN NO ALLEGATION NOR NEGATIVE FINDING BY THE FCA IN RESPECT OF THE
CONDUCT OF BNYM.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Order
11. Resolution Date (MM/DD/YYYY):
02/21/2019
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
NO SANCTIONS WERE IMPOSED
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal,
etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition
has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an
advisory affiliate, date paid and if any portion of penalty was waived:
NOT APPLICABLE
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space
provided).
THE FCA ISSUED THEIR DECISION ON 21 FEBRUARY 2019. THE FCA WILL PUBLISH A NON-CONFIDENTIAL VERSION OF ITS DECISION UNDER THE COMPETITION ACT 1998 IN DUE
COURSE.regulatory · block 4PDF pages 81–83
- Regulator name — filed text
- FINANCIAL INDUSTRY REGULATORY AUTHORITY
- How was matter resolved — filed text
- Acceptance, Waiver & Consent(AWC)
Action status / disposition — filed text
FOLLOWING AN INTERNAL REVIEW, MBSC SELF-REPORTED TO FINRA THAT IT HAD DISCOVERED THAT TWO UNAFFILIATED INVESTMENT ADVISERS HAD CHARGED CLIENT FEES IN EXCESS OF THE AMOUNTS PERMITTED UNDER THE GOVERNING INVESTMENT MANAGEMENT AGREEMENTS. BASED UPON INSTRUCTIONS FROM THE UNAFFILIATED ADVISERS, MBSC REPORTED THAT IT: (1) DISBURSED FEES FROM ACCOUNTS OF A NUMBER OF CUSTOMERS TO THE ADVISERS THAT EXCEEDED THE FEES TO WHICH THE ADVISERS WERE ENTITLED AND (2) INTENDED TO REIMBURSE ALL AFFECTED CUSTOMERS, WITH INTEREST, FOR ANY DISBURSEMENT OF IMPROPER FEES FROM THEIR ACCOUNTS. AS A RESULT OF MBSC'S VOLUNTARY DISCLOSURE, FINRA INVESTIGATED THE MATTER. FINRA FOUND THAT MBSC: (1) FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SUPERVISORY SYSTEM, INCLUDING WRITTEN PROCEDURES, REASONABLY DESIGNED TO REVIEW AND MONITOR THE TRANSMITTALS OF FUNDS FROM CUSTOMER ACCOUNTS TO THIRD PARTY ACCOUNTS AND (2) BY VIRTUE OF THE FOREGOING, VIOLATED NASD RULES 3010, 3012 AND 2110, AND FINRA RULES 3110, 3110(C)(2) AND 2010. ON OCTOBER 18, 2018, 2018, MBSC AND FINRA SETTLED THE MATTER PURSUANT TO A LETTER OF ACCEPTANCE, WAIVER AND CONSENT (THE "AWC") ON A NEITHER-ADMIT-NOR-DENY BASIS IN WHICH MBSC CONSENTED AND AGREED TO THE IMPOSITION OF A CENSURE AND RESTITUTION TO IMPACTED CUSTOMERS IN THE AMOUNT OF APPROXIMATELY $971,289 PLUS INTEREST OF APPROXIMATELY $242,955 FOR A TOTAL AMOUNT OF APPROXIMATELY $1,214,244.
Other filed details
Description of allegations — filed text
FINRA ALLEGED THAT, DURING THE PERIOD JANUARY 2008 THROUGH APRIL 2017, MBSC FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SUPERVISORY SYSTEM AND WRITTEN SUPERVISORY PROCEDURES REASONABLY DESIGNED TO MONITOR THE TRANSMITTAL OF FUNDS FROM CUSTOMER ACCOUNTS TO THIRD PARTIES. FINRA ALLEGED THAT THIS RESULTED IN MBSC FOLLOWING INSTRUCTIONS FROM TWO THIRD-PARTY ADVISORS TO DISBURSE APPROXIMATELY $971,289 IN EXCESS FEES TO SUCH ADVISORS FROM THE ACCOUNTS OF APPROXIMATELY 75 MBSC CUSTOMERS. FINRA ALLEGED THAT MBSC THEREBY VIOLATED NASD RULES 3010, 3012 AND 2110 AND FINRA RULES 3110, 3110(C)(2) AND 2010.
Sanction detail — filed text
MBSC CONSENTED TO THE IMPOSITION OF A CENSURE AND RESTITUTION TO IMPACTED CUSTOMERS IN THE AMOUNT OF APPROXIMATELY $971,289 PLUS INTEREST OF APPROXIMATELY $242,955 FOR A TOTAL AMOUNT OF APPROXIMATELY $1,214,244. MBSC COMPLETED ITS RESTITUTION PAYMENTS, INCLUDING INTEREST, TO THESE CUSTOMERS ON AUGUST 31, 2018.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS This Disclosure Reporting Page (DRP ADV) is an INITIAL OR AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of Form ADV. Regulatory Action Check item(s) being responded to: 11.C(1) 11.C(2) 11.C(3) 11.C(4) 11.C(5) 11.D(1) 11.D(2) 11.D(3) 11.D(4) 11.D(5) 11.E(1) 11.E(2) 11.E(3) 11.E(4) 11.F. 11.G. Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution Page. One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives rise to actions by more than one regulator, provide details for each action on a separate DRP. PART I A. The person(s) or entity(ies) for whom this DRP is being filed is (are): You (the advisory firm) You and one or more of your advisory affiliates One or more of your advisory affiliates If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name). If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box. ADV DRP - ADVISORY AFFILIATE No Information Filed This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser. This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor. If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years ago. This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances: B. If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the event? If the answer is "Yes," no other information on this DRP must be provided. Yes No NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records. PART II 1. Regulatory Action initiated by: SEC Other Federal State SRO Foreign (Full name of regulator, foreign financial regulatory authority, federal, state, or SRO) FINANCIAL INDUSTRY REGULATORY AUTHORITY 2. Principal Sanction: Censure Other Sanctions: RESTITUTION PLUS INTEREST. 3. Date Initiated (MM/DD/YYYY): 10/18/2018 Exact Explanation If not exact, provide explanation: 4. Docket/Case Number: FINRA LETTER OF ACCEPTANCE, WAIVER AND CONSENT NO. 2017054119401 5. Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable): NOT APPLICABLE 6. Principal Product Type: No Product Other Product Types: 7. Describe the allegations related to this regulatory action (your response must fit within the space provided): FINRA ALLEGED THAT, DURING THE PERIOD JANUARY 2008 THROUGH APRIL 2017, MBSC FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SUPERVISORY SYSTEM AND WRITTEN SUPERVISORY PROCEDURES REASONABLY DESIGNED TO MONITOR THE TRANSMITTAL OF FUNDS FROM CUSTOMER ACCOUNTS TO THIRD PARTIES. FINRA ALLEGED THAT THIS RESULTED IN MBSC FOLLOWING INSTRUCTIONS FROM TWO THIRD-PARTY ADVISORS TO DISBURSE APPROXIMATELY $971,289 IN EXCESS FEES TO SUCH ADVISORS FROM THE ACCOUNTS OF APPROXIMATELY 75 MBSC CUSTOMERS. FINRA ALLEGED THAT MBSC THEREBY VIOLATED NASD RULES 3010, 3012 AND 2110 AND FINRA RULES 3110, 3110(C)(2) AND 2010. 8. Current Status? Pending On Appeal Final 9. If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed: If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only. 10. How was matter resolved: Acceptance, Waiver & Consent(AWC) 11. Resolution Date (MM/DD/YYYY): 10/18/2018 Exact Explanation If not exact, provide explanation: 12. Resolution Detail: A. Were any of the following Sanctions Ordered (check all appropriate items)? Monetary/Fine Amount: $ Revocation/Expulsion/Denial Disgorgement/Restitution Censure Cease and Desist/Injunction Bar Suspension B. Other Sanctions Ordered: NOT APPLICABLE. Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal, etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an advisory affiliate, date paid and if any portion of penalty was waived: MBSC CONSENTED TO THE IMPOSITION OF A CENSURE AND RESTITUTION TO IMPACTED CUSTOMERS IN THE AMOUNT OF APPROXIMATELY $971,289 PLUS INTEREST OF APPROXIMATELY $242,955 FOR A TOTAL AMOUNT OF APPROXIMATELY $1,214,244. MBSC COMPLETED ITS RESTITUTION PAYMENTS, INCLUDING INTEREST, TO THESE CUSTOMERS ON AUGUST 31, 2018. 13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space provided). FOLLOWING AN INTERNAL REVIEW, MBSC SELF-REPORTED TO FINRA THAT IT HAD DISCOVERED THAT TWO UNAFFILIATED INVESTMENT ADVISERS HAD CHARGED CLIENT FEES IN EXCESS OF THE AMOUNTS PERMITTED UNDER THE GOVERNING INVESTMENT MANAGEMENT AGREEMENTS. BASED UPON INSTRUCTIONS FROM THE UNAFFILIATED ADVISERS, MBSC REPORTED THAT IT: (1) DISBURSED FEES FROM ACCOUNTS OF A NUMBER OF CUSTOMERS TO THE ADVISERS THAT EXCEEDED THE FEES TO WHICH THE ADVISERS WERE ENTITLED AND (2) INTENDED TO REIMBURSE ALL AFFECTED CUSTOMERS, WITH INTEREST, FOR ANY DISBURSEMENT OF IMPROPER FEES FROM THEIR ACCOUNTS. AS A RESULT OF MBSC'S VOLUNTARY DISCLOSURE, FINRA INVESTIGATED THE MATTER. FINRA FOUND THAT MBSC: (1) FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SUPERVISORY SYSTEM, INCLUDING WRITTEN PROCEDURES, REASONABLY DESIGNED TO REVIEW AND MONITOR THE TRANSMITTALS OF FUNDS FROM CUSTOMER ACCOUNTS TO THIRD PARTY ACCOUNTS AND (2) BY VIRTUE OF THE FOREGOING, VIOLATED NASD RULES 3010, 3012 AND 2110, AND FINRA RULES 3110, 3110(C)(2) AND 2010. ON OCTOBER 18, 2018, 2018, MBSC AND FINRA SETTLED THE MATTER PURSUANT TO A LETTER OF ACCEPTANCE, WAIVER AND CONSENT (THE "AWC") ON A NEITHER-ADMIT-NOR-DENY BASIS IN WHICH MBSC CONSENTED AND AGREED TO THE IMPOSITION OF A CENSURE AND RESTITUTION TO IMPACTED CUSTOMERS IN THE AMOUNT OF APPROXIMATELY $971,289 PLUS INTEREST OF APPROXIMATELY $242,955 FOR A TOTAL AMOUNT OF APPROXIMATELY $1,214,244.
regulatory · block 5BNY MELLON INVESTMENT ADVISER, INC.PDF pages 83–85
- Advisory affiliate name — filed text
- BNY MELLON INVESTMENT ADVISER, INC.
- Regulator name — filed text
- SECURITIES AND EXCHANGE COMMISSION
- Monetary/Fine Amount — filed text
- $ 1,500,000.00
- How was matter resolved — filed text
- Order
Action status / disposition — filed text
UNDER THE MAY 23, 2022 SETTLEMENT ORDER, WITHOUT ADMITTING OR DENYING THE SEC'S FINDINGS, BNYMIA WAS CENSURED AND ORDERED TO CEASE AND DESIST FROM COMMITTING OR CAUSING VIOLATIONS OF CERTAIN STATUTORY PROVISIONS OF THE INVESTMENT ADVISERS ACT OF 1940 (AND CERTAIN RULES THEREUNDER) AND THE INVESTMENT COMPANY ACT OF 1940, AND AGREED TO PAY A CIVIL PENALTY OF $1.5 MILLION TO THE SEC WITHIN 10 DAYS OF THE ENTRY OF THE ORDER. THE SETTLEMENT ORDER REFERENCES THAT, IN ACCEPTING THE ORDER, THE COMMISSION CONSIDERED REMEDIAL ACTS PROMPTLY UNDERTAKEN BY RESPONDENT AND COOPERATION AFFORDED THE COMMISSION STAFF, INCLUDING THAT, THROUGHOUT THE STAFF'S INVESTIGATION, BNYMIA PROVIDED DETAILED FACTUAL SUMMARIES AND MADE SUBSTANTIVE PRESENTATIONS ON KEY TOPICS WHICH ADVANCED THE QUALITY AND EFFICIENCY OF THE STAFF'S INVESTIGATION AND CONSERVED COMMISSION RESOURCES. THE SETTLEMENT ORDER DOES NOT AFFECT BNYMIA'S ABILITY TO MANAGE THE IMPLICATED MUTUAL FUNDS (OR ANY OTHER FUNDS). A COPY OF THE SETTLEMENT ORDER IS AVAILABLE ON THE SEC'S WEBSITE AT HTTPS://WWW.SEC.GOV.
Other filed details
Description of allegations — filed text
ON MAY 23, 2022, THE SECURITIES AND EXCHANGE COMMISSION ("SEC") ENTERED A SETTLEMENT ORDER, RELATING TO ALLEGED MATERIAL MISSTATEMENTS AND OMISSIONS BY BNY MELLON INVESTMENT ADVISER, INC. ("BNYMIA") CONCERNING THE CONSIDERATION OF ENVIRONMENTAL, SOCIAL, AND GOVERNANCE ("ESG") PRINCIPLES TO MAKE INVESTMENT DECISIONS FOR CERTAIN MUTUAL FUNDS ADVISED BY BNYMIA. THE SEC ALLEGED THAT BNYMIA MADE THESE REPRESENTATIONS TO MUTUAL FUND INVESTORS (IN PROSPECTUSES) AND THE FUNDS BOARDS, AS WELL AS IN WRITTEN RESPONSES TO REQUESTS FOR PROPOSALS FROM OTHER INVESTMENT FIRMS. A COPY OF THE SETTLEMENT ORDER IS AVAILABLE ON THE SEC'S WEBSITE AT HTTPS://WWW.SEC.GOV.
Sanction detail — filed text
AS SPECIFIED IN SECTION 12.A ABOVE AND IN SECTION 13 BELOW, BNYMIA AGREED TO PAY A CIVIL PENALTY IN THE AMOUNT OF $1.5 MILLION, WHICH WAS PAID ON MAY 26, 2022.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of
Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution
Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives
rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
CRD
Number:
105642
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
BNY MELLON INVESTMENT ADVISER,
INC.
(For individuals, Last, First, Middle)
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for
registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event
occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years
ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the
event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
SECURITIES AND EXCHANGE COMMISSION
2.
Principal Sanction:
Cease and Desist
Other Sanctions:
CENSURE AND CIVIL MONETARY PENALTY.
3.
Date Initiated (MM/DD/YYYY):
05/23/2022
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
SEC ADMINISTRATIVE PROCEEDING FILE NO. 3-20867
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
BNY MELLON INVESTMENT ADVISER, INC.
6.
Principal Product Type:
Mutual Fund(s)
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
ON MAY 23, 2022, THE SECURITIES AND EXCHANGE COMMISSION ("SEC") ENTERED A SETTLEMENT ORDER, RELATING TO ALLEGED MATERIAL MISSTATEMENTS AND OMISSIONS
BY BNY MELLON INVESTMENT ADVISER, INC. ("BNYMIA") CONCERNING THE CONSIDERATION OF ENVIRONMENTAL, SOCIAL, AND GOVERNANCE ("ESG") PRINCIPLES TO MAKE
INVESTMENT DECISIONS FOR CERTAIN MUTUAL FUNDS ADVISED BY BNYMIA. THE SEC ALLEGED THAT BNYMIA MADE THESE REPRESENTATIONS TO MUTUAL FUND INVESTORS (IN
PROSPECTUSES) AND THE FUNDS BOARDS, AS WELL AS IN WRITTEN RESPONSES TO REQUESTS FOR PROPOSALS FROM OTHER INVESTMENT FIRMS. A COPY OF THE SETTLEMENT
ORDER IS AVAILABLE ON THE SEC'S WEBSITE AT HTTPS://WWW.SEC.GOV.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
N/A
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Order
11. Resolution Date (MM/DD/YYYY):
05/23/2022
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 1,500,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal,
etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition
has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an
advisory affiliate, date paid and if any portion of penalty was waived:
AS SPECIFIED IN SECTION 12.A ABOVE AND IN SECTION 13 BELOW, BNYMIA AGREED TO PAY A CIVIL PENALTY IN THE AMOUNT OF $1.5 MILLION, WHICH WAS PAID ON
MAY 26, 2022.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space
provided).
UNDER THE MAY 23, 2022 SETTLEMENT ORDER, WITHOUT ADMITTING OR DENYING THE SEC'S FINDINGS, BNYMIA WAS CENSURED AND ORDERED TO CEASE AND DESIST FROM
COMMITTING OR CAUSING VIOLATIONS OF CERTAIN STATUTORY PROVISIONS OF THE INVESTMENT ADVISERS ACT OF 1940 (AND CERTAIN RULES THEREUNDER) AND THE
INVESTMENT COMPANY ACT OF 1940, AND AGREED TO PAY A CIVIL PENALTY OF $1.5 MILLION TO THE SEC WITHIN 10 DAYS OF THE ENTRY OF THE ORDER. THE SETTLEMENT
ORDER REFERENCES THAT, IN ACCEPTING THE ORDER, THE COMMISSION CONSIDERED REMEDIAL ACTS PROMPTLY UNDERTAKEN BY RESPONDENT AND COOPERATION AFFORDED
THE COMMISSION STAFF, INCLUDING THAT, THROUGHOUT THE STAFF'S INVESTIGATION, BNYMIA PROVIDED DETAILED FACTUAL SUMMARIES AND MADE SUBSTANTIVE
PRESENTATIONS ON KEY TOPICS WHICH ADVANCED THE QUALITY AND EFFICIENCY OF THE STAFF'S INVESTIGATION AND CONSERVED COMMISSION RESOURCES. THE
SETTLEMENT ORDER DOES NOT AFFECT BNYMIA'S ABILITY TO MANAGE THE IMPLICATED MUTUAL FUNDS (OR ANY OTHER FUNDS). A COPY OF THE SETTLEMENT ORDER IS
AVAILABLE ON THE SEC'S WEBSITE AT HTTPS://WWW.SEC.GOV.regulatory · block 6PERSHING LLCPDF pages 85–87
- Advisory affiliate name — filed text
- PERSHING LLC
- Regulator name — filed text
- SECURITIES AND EXCHANGE COMMISSION
- Monetary/Fine Amount — filed text
- $ 40,000,000.00
- How was matter resolved — filed text
- Decision & Order of Offer of Settlement
Action status / disposition — filed text
BNYMSC AND PERSHING CONSENTED TO ENTRY OF THE ORDER AND ADMITTED THE FACTS ALLEGED IN THE ORDER AND ACKNOWLEDGED THAT THEIR CONDUCT VIOLATED THE FEDERAL SECURITIES LAWS. THE ALLEGATIONS, DISPOSITION, FINDINGS, AND SANCTIONS OF THE ORDER ARE DESCRIBED IN ITEMS 7 AND 12.
Other filed details
Description of allegations — filed text
ON AUGUST 14, 2024, THE U.S. SECURITIES AND EXCHANGE COMMISSION ("SEC") ISSUED A SETTLED ADMINISTRATIVE ORDER IN WHICH IT FOUND THAT BNY MELLON SECURITIES CORPORATION ("BNYMSC") AND PERSHING LLC ("PERSHING") WILLFULLY VIOLATED SECTION 17(A) OF THE SECURITIES EXCHANGE ACT OF 1934 (THE "EXCHANGE ACT") AND RULE 17A-4(B) THEREUNDER. THE ORDER ALSO FOUND THAT BNYMSC AND PERSHING FAILED TO REASONABLY SUPERVISE THEIR EMPLOYEES WITHIN THE MEANING OF EXCHANGE ACT SECTION 15(B)(4)(E). SPECIFICALLY, THE ORDER FOUND THAT FROM AT LEAST JANUARY 2020 TO THE DATE OF THE ORDER, BNYMSC AND PERSHING PERSONNEL SENT AND RECEIVED TEXT MESSAGE COMMUNICATIONS ON PLATFORMS THAT WERE NOT APPROVED FOR BUSINESS PURPOSES, MANY OF WHICH WERE NOT PRESERVED BY BNYMSC OR PERSHING. IN NUMEROUS INSTANCES, BNYMSC AND PERSHING SUPERVISORS THEMSELVES COMMUNICATED USING THESE UNAPPROVED COMMUNICATION PLATFORMS. IN DETERMINING TO ACCEPT BNYMSC'S AND PERSHING'S OFFERS OF SETTLEMENT, THE SEC CONSIDERED REMEDIAL ACTS PROMPTLY UNDERTAKEN BY BNYMSC AND PERSHING AND COOPERATION AFFORDED THE COMMISSION STAFF.
Sanction detail — filed text
BNYMSC AND PERSHING WERE (I) CENSURED; (II) ORDERED TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF EXCHANGE ACT SECTION 17(A) AND RULE 17A-4 THEREUNDER; (III) ORDERED TO PAY A PENALTY OF $40 MILLION, WHICH WAS PAID IN FULL ON AUGUST 20, 2024; AND (IV) ORDERED TO COMPLY WITH CERTAIN UNDERTAKINGS, INCLUDING THE RETENTION OF AN INDEPENDENT COMPLIANCE CONSULTANT TO REVIEW THEIR POLICIES AND PROCEDURES RELATED TO ELECTRONIC COMMUNICATIONS.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of
Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution
Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives
rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
CRD Number:
7560
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
PERSHING LLC
(For individuals, Last, First, Middle)
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for
registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event
occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years
ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the
event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
SECURITIES AND EXCHANGE COMMISSION
2.
Principal Sanction:
Cease and Desist
Other Sanctions:
CENSURE, MONETARY FINE, UNDERTAKING
3.
Date Initiated (MM/DD/YYYY):
08/14/2024
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
ADMIN. PRO. FILE NO. 3-22009
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
No Product
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
ON AUGUST 14, 2024, THE U.S. SECURITIES AND EXCHANGE COMMISSION ("SEC") ISSUED A SETTLED ADMINISTRATIVE ORDER IN WHICH IT FOUND THAT BNY MELLON
SECURITIES CORPORATION ("BNYMSC") AND PERSHING LLC ("PERSHING") WILLFULLY VIOLATED SECTION 17(A) OF THE SECURITIES EXCHANGE ACT OF 1934 (THE "EXCHANGE
ACT") AND RULE 17A-4(B) THEREUNDER. THE ORDER ALSO FOUND THAT BNYMSC AND PERSHING FAILED TO REASONABLY SUPERVISE THEIR EMPLOYEES WITHIN THE MEANING
OF EXCHANGE ACT SECTION 15(B)(4)(E). SPECIFICALLY, THE ORDER FOUND THAT FROM AT LEAST JANUARY 2020 TO THE DATE OF THE ORDER, BNYMSC AND PERSHING
PERSONNEL SENT AND RECEIVED TEXT MESSAGE COMMUNICATIONS ON PLATFORMS THAT WERE NOT APPROVED FOR BUSINESS PURPOSES, MANY OF WHICH WERE NOT
PRESERVED BY BNYMSC OR PERSHING. IN NUMEROUS INSTANCES, BNYMSC AND PERSHING SUPERVISORS THEMSELVES COMMUNICATED USING THESE UNAPPROVED
COMMUNICATION PLATFORMS. IN DETERMINING TO ACCEPT BNYMSC'S AND PERSHING'S OFFERS OF SETTLEMENT, THE SEC CONSIDERED REMEDIAL ACTS PROMPTLY
UNDERTAKEN BY BNYMSC AND PERSHING AND COOPERATION AFFORDED THE COMMISSION STAFF.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Decision & Order of Offer of Settlement
11. Resolution Date (MM/DD/YYYY):
08/14/2024
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 40,000,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
UNDERTAKINGS
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal,
etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition
has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an
advisory affiliate, date paid and if any portion of penalty was waived:
BNYMSC AND PERSHING WERE (I) CENSURED; (II) ORDERED TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF
EXCHANGE ACT SECTION 17(A) AND RULE 17A-4 THEREUNDER; (III) ORDERED TO PAY A PENALTY OF $40 MILLION, WHICH WAS PAID IN FULL ON AUGUST 20, 2024; AND
(IV) ORDERED TO COMPLY WITH CERTAIN UNDERTAKINGS, INCLUDING THE RETENTION OF AN INDEPENDENT COMPLIANCE CONSULTANT TO REVIEW THEIR POLICIES AND
PROCEDURES RELATED TO ELECTRONIC COMMUNICATIONS.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space
provided).
BNYMSC AND PERSHING CONSENTED TO ENTRY OF THE ORDER AND ADMITTED THE FACTS ALLEGED IN THE ORDER AND ACKNOWLEDGED THAT THEIR CONDUCT VIOLATED THE
FEDERAL SECURITIES LAWS. THE ALLEGATIONS, DISPOSITION, FINDINGS, AND SANCTIONS OF THE ORDER ARE DESCRIBED IN ITEMS 7 AND 12.Show 7 more source blocks
regulatory · block 7BNY MELLON SECURITIES CORPORATIONPDF pages 87–89
- Advisory affiliate name — filed text
- BNY MELLON SECURITIES CORPORATION
- Regulator name — filed text
- U.S. SECURITIES AND EXCHANGE COMMISSION
- Monetary/Fine Amount — filed text
- $ 40,000,000.00
- How was matter resolved — filed text
- Decision & Order of Offer of Settlement
Action status / disposition — filed text
BNYMSC AND PERSHING CONSENTED TO ENTRY OF THE ORDER AND ADMITTED THE FACTS ALLEGED IN THE ORDER AND ACKNOWLEDGED THAT THEIR CONDUCT VIOLATED THE FEDERAL SECURITIES LAWS. THE ALLEGATIONS, DISPOSITION, FINDINGS, AND SANCTIONS OF THE ORDER ARE DESCRIBED IN ITEMS 7 AND 12.
Other filed details
Description of allegations — filed text
ON AUGUST 14, 2024, THE U.S. SECURITIES AND EXCHANGE COMMISSION ("SEC") ISSUED A SETTLED ADMINISTRATIVE ORDER IN WHICH IT FOUND THAT BNY MELLON SECURITIES CORPORATION ("BNYMSC") AND PERSHING LLC ("PERSHING") WILLFULLY VIOLATED SECTION 17(A) OF THE SECURITIES EXCHANGE ACT OF 1934 (THE "EXCHANGE ACT") AND RULE 17A-4(B) THEREUNDER. THE ORDER ALSO FOUND THAT BNYMSC AND PERSHING FAILED TO REASONABLY SUPERVISE THEIR EMPLOYEES WITHIN THE MEANING OF EXCHANGE ACT SECTION 15(B)(4)(E). SPECIFICALLY, THE ORDER FOUND THAT FROM AT LEAST JANUARY 2020 TO THE DATE OF THE ORDER, BNYMSC AND PERSHING PERSONNEL SENT AND RECEIVED TEXT MESSAGE COMMUNICATIONS ON PLATFORMS THAT WERE NOT APPROVED FOR BUSINESS PURPOSES, MANY OF WHICH WERE NOT PRESERVED BY BNYMSC OR PERSHING. IN NUMEROUS INSTANCES, BNYMSC AND PERSHING SUPERVISORS THEMSELVES COMMUNICATED USING THESE UNAPPROVED COMMUNICATION PLATFORMS. IN DETERMINING TO ACCEPT BNYMSC'S AND PERSHING'S OFFERS OF SETTLEMENT, THE SEC CONSIDERED REMEDIAL ACTS PROMPTLY UNDERTAKEN BY BNYMSC AND PERSHING AND COOPERATION AFFORDED THE COMMISSION STAFF.
Sanction detail — filed text
BNYMSC AND PERSHING WERE (I) CENSURED; (II) ORDERED TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF EXCHANGE ACT SECTION 17(A) AND RULE 17A-4 THEREUNDER; (III) ORDERED TO PAY A PENALTY OF $40 MILLION; AND (IV) ORDERED TO COMPLY WITH CERTAIN UNDERTAKINGS, INCLUDING THE RETENTION OF AN INDEPENDENT COMPLIANCE CONSULTANT TO REVIEW THEIR POLICIES AND PROCEDURES RELATED TO ELECTRONIC COMMUNICATIONS.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of
Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution
Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives
rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
CRD
Number:
231
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
BNY MELLON SECURITIES
CORPORATION
(For individuals, Last, First, Middle)
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for
registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event
occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years
ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the
event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
U.S. SECURITIES AND EXCHANGE COMMISSION
2.
Principal Sanction:
Cease and Desist
Other Sanctions:
CENSURE, MONETARY FINE, UNDERTAKING
3.
Date Initiated (MM/DD/YYYY):
08/14/2024
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
ADMIN. PRO. FILE NO. 3-22009
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
No Product
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
ON AUGUST 14, 2024, THE U.S. SECURITIES AND EXCHANGE COMMISSION ("SEC") ISSUED A SETTLED ADMINISTRATIVE ORDER IN WHICH IT FOUND THAT BNY MELLON
SECURITIES CORPORATION ("BNYMSC") AND PERSHING LLC ("PERSHING") WILLFULLY VIOLATED SECTION 17(A) OF THE SECURITIES EXCHANGE ACT OF 1934 (THE "EXCHANGE
ACT") AND RULE 17A-4(B) THEREUNDER. THE ORDER ALSO FOUND THAT BNYMSC AND PERSHING FAILED TO REASONABLY SUPERVISE THEIR EMPLOYEES WITHIN THE MEANING
OF EXCHANGE ACT SECTION 15(B)(4)(E). SPECIFICALLY, THE ORDER FOUND THAT FROM AT LEAST JANUARY 2020 TO THE DATE OF THE ORDER, BNYMSC AND PERSHING
PERSONNEL SENT AND RECEIVED TEXT MESSAGE COMMUNICATIONS ON PLATFORMS THAT WERE NOT APPROVED FOR BUSINESS PURPOSES, MANY OF WHICH WERE NOT
PRESERVED BY BNYMSC OR PERSHING. IN NUMEROUS INSTANCES, BNYMSC AND PERSHING SUPERVISORS THEMSELVES COMMUNICATED USING THESE UNAPPROVED
COMMUNICATION PLATFORMS. IN DETERMINING TO ACCEPT BNYMSC'S AND PERSHING'S OFFERS OF SETTLEMENT, THE SEC CONSIDERED REMEDIAL ACTS PROMPTLY
UNDERTAKEN BY BNYMSC AND PERSHING AND COOPERATION AFFORDED THE COMMISSION STAFF.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Decision & Order of Offer of Settlement
11. Resolution Date (MM/DD/YYYY):
08/14/2024
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 40,000,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
UNDERTAKINGS
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal,
etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition
has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an
advisory affiliate, date paid and if any portion of penalty was waived:
BNYMSC AND PERSHING WERE (I) CENSURED; (II) ORDERED TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF
EXCHANGE ACT SECTION 17(A) AND RULE 17A-4 THEREUNDER; (III) ORDERED TO PAY A PENALTY OF $40 MILLION; AND (IV) ORDERED TO COMPLY WITH CERTAIN
UNDERTAKINGS, INCLUDING THE RETENTION OF AN INDEPENDENT COMPLIANCE CONSULTANT TO REVIEW THEIR POLICIES AND PROCEDURES RELATED TO ELECTRONIC
COMMUNICATIONS.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space
provided).
BNYMSC AND PERSHING CONSENTED TO ENTRY OF THE ORDER AND ADMITTED THE FACTS ALLEGED IN THE ORDER AND ACKNOWLEDGED THAT THEIR CONDUCT VIOLATED THE
FEDERAL SECURITIES LAWS. THE ALLEGATIONS, DISPOSITION, FINDINGS, AND SANCTIONS OF THE ORDER ARE DESCRIBED IN ITEMS 7 AND 12.regulatory · block 8PDF pages 89–90
- Regulator name — filed text
- COMMODITY FUTURES TRADING COMMISSION
- Monetary/Fine Amount — filed text
- $ 500,000.00
- How was matter resolved — filed text
- Decision & Order of Offer of Settlement
Action status / disposition — filed text
BNYM AND BNYSC CONSENTED TO ENTRY OF THE ORDER, WITHOUT ADMITTING OR DENYING THE FINDINGS OR CONCLUSIONS THEREIN. THE ALLEGATIONS, DISPOSITION, FINDINGS, AND SANCTIONS OF THE ORDER ARE DESCRIBED IN ITEMS 7 AND 12.
Other filed details
Description of allegations — filed text
ON SEPTEMBER 4, 2025, THE U.S. COMMODITIES FUTURES TRADING COMMISSION ("CFTC") ISSUED A SETTLED ADMINISTRATIVE ORDER AGAINST THE BANK OF NEW YORK MELLON ("BNYM") AND BNY MELLON SECURITIES CORPORATION ("BNYSC"), WHICH FOUND THAT BNYSC VIOLATED SECTION 4G OF THE COMMODITY EXCHANGE ACT ("CEA") AND CFTC REGULATION 1.35(A)(3), AND THAT BYNM VIOLATED CEA SECTIONS 4S(F)(1)(B) AND 4S(G)(1) AND CFTC REGULATIONS 23.201(A)(1), 23.202(A)(1) AND (B)(1). SPECIFICALLY, THE ORDER FOUND THAT FROM AT LEAST MAY 2020 TO SEPTEMBER 2025, BNYM AND BNYSC PERSONNEL COMMUNICATED ON PLATFORMS THAT WERE NOT APPROVED FOR BUSINESS PURPOSES, MANY OF WHICH WERE NOT PRESERVED BY BNYM OR BNYSC. THE ORDER ALSO FOUND THAT BNYSC FAILED TO DILIGENTLY SUPERVISE ITS ACTIVITIES IN VIOLATION OF CFTC REGULATION 166.3 AND THAT BNYM FAILED TO DILIGENTLY SUPERVISE ITS ACTIVITIES IN VIOLATION OF CEA SECTION 4S(H)(1)(B) AND CFTC REGULATION 23.602(A).
Sanction detail — filed text
BNYM WAS ORDERED TO CEASE AND DESIST FROM VIOLATING CEA SECTIONS 4S(F)(1)(B), 4S(G)(1), AND 4S(H)(1)(B) AND CFTC REGULATIONS 23.201(A)(1), 23.202(A)(1) AND (B)(1), AND 23.602(A); BNYSC WAS ORDERED TO CEASE AND DEIST FROM VIOLATING CEA SECTION 4G AND CFTC REGULATIONS 1.35(A)(3) AND 166.3. BNYM AND BNYSC WERE JOINTLY ORDERED TO PAY A PENALTY OF $500,000 AND TO COMPLY WITH CERTAIN UNDERTAKINGS, INCLUDING IMPLEMENTING THE RECOMMENDATIONS OF AN INDEPENDENT COMPLIANCE CONSULTANT.
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Items 11.C., 11.D., 11.E., 11.F. or 11.G. of
Form ADV.
Regulatory Action
Check item(s) being responded to:
11.C(1)
11.C(2)
11.C(3)
11.C(4)
11.C(5)
11.D(1)
11.D(2)
11.D(3)
11.D(4)
11.D(5)
11.E(1)
11.E(2)
11.E(3)
11.E(4)
11.F.
11.G.
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution
Page.
One event may result in more than one affirmative answer to Items 11.C., 11.D., 11.E., 11.F. or 11.G. Use only one DRP to report details related to the same event. If an event gives
rise to actions by more than one regulator, provide details for each action on a separate DRP.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
No Information Filed
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for
registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.D(4), and only if that event
occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten years
ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the
event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Regulatory Action initiated by:
SEC
Other Federal
State
SRO
Foreign
(Full name of regulator, foreign financial regulatory authority, federal, state, or SRO)
COMMODITY FUTURES TRADING COMMISSION
2.
Principal Sanction:
Cease and Desist
Other Sanctions:
MONETARY FINE, UNDERTAKING
3.
Date Initiated (MM/DD/YYYY):
09/04/2025
Exact
Explanation
If not exact, provide explanation:
4.
Docket/Case Number:
CFTC DOCKET NO. 25-01
5.
Advisory Affiliate Employing Firm when activity occurred which led to the regulatory action (if applicable):
6.
Principal Product Type:
No Product
Other Product Types:
7.
Describe the allegations related to this regulatory action (your response must fit within the space provided):
ON SEPTEMBER 4, 2025, THE U.S. COMMODITIES FUTURES TRADING COMMISSION ("CFTC") ISSUED A SETTLED ADMINISTRATIVE ORDER AGAINST THE BANK OF NEW YORK
MELLON ("BNYM") AND BNY MELLON SECURITIES CORPORATION ("BNYSC"), WHICH FOUND THAT BNYSC VIOLATED SECTION 4G OF THE COMMODITY EXCHANGE ACT ("CEA") AND
CFTC REGULATION 1.35(A)(3), AND THAT BYNM VIOLATED CEA SECTIONS 4S(F)(1)(B) AND 4S(G)(1) AND CFTC REGULATIONS 23.201(A)(1), 23.202(A)(1) AND (B)(1).
SPECIFICALLY, THE ORDER FOUND THAT FROM AT LEAST MAY 2020 TO SEPTEMBER 2025, BNYM AND BNYSC PERSONNEL COMMUNICATED ON PLATFORMS THAT WERE NOT
APPROVED FOR BUSINESS PURPOSES, MANY OF WHICH WERE NOT PRESERVED BY BNYM OR BNYSC. THE ORDER ALSO FOUND THAT BNYSC FAILED TO DILIGENTLY SUPERVISE ITS
ACTIVITIES IN VIOLATION OF CFTC REGULATION 166.3 AND THAT BNYM FAILED TO DILIGENTLY SUPERVISE ITS ACTIVITIES IN VIOLATION OF CEA SECTION 4S(H)(1)(B) AND CFTC
REGULATION 23.602(A).
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, regulatory action appealed to (SEC, SRO, Federal or State Court) and Date Appeal Filed:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 13 only.
10. How was matter resolved:
Decision & Order of Offer of Settlement
11. Resolution Date (MM/DD/YYYY):
09/04/2025
Exact
Explanation
If not exact, provide explanation:
12. Resolution Detail:
A. Were any of the following Sanctions Ordered (check all appropriate items)?
Monetary/Fine Amount: $ 500,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions Ordered:
UNDERTAKINGS
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal,
etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition
has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement or monetary compensation, provide total amount, portion levied against you or an
advisory affiliate, date paid and if any portion of penalty was waived:
BNYM WAS ORDERED TO CEASE AND DESIST FROM VIOLATING CEA SECTIONS 4S(F)(1)(B), 4S(G)(1), AND 4S(H)(1)(B) AND CFTC REGULATIONS 23.201(A)(1), 23.202(A)(1)
AND (B)(1), AND 23.602(A); BNYSC WAS ORDERED TO CEASE AND DEIST FROM VIOLATING CEA SECTION 4G AND CFTC REGULATIONS 1.35(A)(3) AND 166.3. BNYM AND
BNYSC WERE JOINTLY ORDERED TO PAY A PENALTY OF $500,000 AND TO COMPLY WITH CERTAIN UNDERTAKINGS, INCLUDING IMPLEMENTING THE RECOMMENDATIONS OF
AN INDEPENDENT COMPLIANCE CONSULTANT.
13. Provide a brief summary of details related to the action status and (or) disposition and include relevant terms, conditions and dates (your response must fit within the space
provided).
BNYM AND BNYSC CONSENTED TO ENTRY OF THE ORDER, WITHOUT ADMITTING OR DENYING THE FINDINGS OR CONCLUSIONS THEREIN. THE ALLEGATIONS, DISPOSITION,
FINDINGS, AND SANCTIONS OF THE ORDER ARE DESCRIBED IN ITEMS 7 AND 12.civil judicial · block 1PDF pages 91–92
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Item 11.H. of Part 1A or Item 2.F. of Part 1B
of Form ADV.
Civil Judicial
Check Part 1A item(s) being responded to:
11.H(1)(a)
11.H(1)(b)
11.H(1)(c)
11.H(2)
Check Part 1B item(s) being responded to:
2.F(1)
2.F(2)
2.F(3)
2.F(4)
2.F(5)
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution
Page.
One event may result in more than one affirmative answer to Item 11.H. of Part 1A or Item 2.F. of Part 1B. Use only one DRP to report details related to the same event. Unrelated
civil judicial actions must be reported on separate DRPs.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
CRD Number:
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
CIBC MELLON TRUST COMPANY
(For individuals, Last, First, Middle)
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for
registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.H.(1)(a), and only if that
event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten
years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the
event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Court Action initiated by: (Name of regulator, foreign financial regulatory authority, SRO, commodities exchange, agency, firm, private plaintiff, etc.)
UNITED STATES SECURITIES AND EXCHANGE COMMISSION ("SEC") .
2.
Principal Relief Sought:
Injunction
Other Relief Sought:
CIVIL MONETARY PENALTY; DISGORGEMENT. IN A RELATED SEC ADMINISTRATIVE PROCEEDING, CMTC AGREED TO AN ORDER CENSURING THE FIRM AND AN UNDERTAKING TO
ENGAGE AN INDEPENDENT CONSULTANT TO REVIEW ITS RELEVANT BUSINESSES AND PROCEDURES.
3.
Filing Date of Court Action (MM/DD/YYYY):
02/24/2005
Exact
Explanation
If not exact, provide explanation:
4.
Principal Product Type:
Other
Other Product Types:
TRANSFER AGENT SERVICES AND STOCK PLAN ADMINISTRATION SERVICES.
5.
Formal Action was brought in (include name of Federal, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case Number):
U.S. DISTRICT COURT FOR THE DISTRICT OF COLUMBIA; WASHINGTON, D.C.; DOCKET NO. 1:05CV00333(PLF).
6.
Advisory Affiliate Employing Firm when activity occurred which led to the civil judicial action (if applicable):
7.
Describe the allegations related to this civil action (your response must fit within the space provided):
SEC ALLEGED VIOLATIONS OF SECURITIES ACT SECTION 5, EXCHANGE ACT SECTION 10(B) AND RULE 10B-5, EXCHANGE ACT SECTION 15(A), EXCHANGE ACT SECTION 17A(C)
(1), AND FROM AIDING AND ABETTING VIOLATIONS OF EXCHANGE ACT SECTION 10(B) AND RULE 10B-5. SEC ALLEGED THAT CMTC (AN ENTITY THAT IS 50% OWNED BY MELLON
CANADA HOLDING COMPANY) HAD FAILED TO REGISTER AS A TRANSFER AGENT WITH THE SEC, THAT IT HAD ISSUED "LEGEND FREE" STOCK CERTIFICATES OF A COMPANY
WHOSE SHARES WERE NOT REGISTERED WITH THE SEC, THAT ONE OF ITS MANAGERS HAD ACCEPTED PAYMENTS OF STOCK FROM THE COMPANY'S OFFICERS TO ISSUE THE
CERTIFICATES, AND THAT IT HAD ACTED AS AN UNREGISTERED BROKER OR DEALER IN CONNECTION WITH ITS STOCK PLAN ADMINISTRATION BUSINESS.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, action appealed to (provide name of court) and Date Appeal Filed (MM/DD/YYYY):
10. If pending, date notice/process was served (MM/DD/YYYY):
Exact
Explanation
If not exact, provide explanation:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 14 only.
11. How was matter resolved:
Consent
12. Resolution Date (MM/DD/YYYY):
02/24/2005
Exact
Explanation
If not exact, provide explanation:
13. Resolution Detail:
A. Were any of the following Sanctions Ordered or Relief Granted(check appropriate items)?
Monetary/Fine Amount: $ 5,000,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions:
IN A RELATED SEC ADMINISTRATIVE PROCEEDING, CMTC AGREED TO AN ORDER CENSURING THE FIRM AND AN UNDERTAKING TO ENGAGE AN INDEPENDENT CONSULTANT
TO REVIEW ITS RELEVANT BUSINESSS AND PROCEDURES.
C.
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal,
etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition
has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement, or monetary compensation, provide total amount, portion levied against you or an
advisory affiliate, date paid and if any portion of penalty was waived:
CMTC WAS PERMANENTLY ENJOINED FROM PRESCRIBED VIOLATIONS OF SECURITIES ACT SECTION 5, EXHCANGE ACT SECTION 10(B) AND RULE 10B-5, EXCHANGE ACT
SECTION 15(A), EXCHANGE ACT SECTION 17A(C)(1), AND FROM AIDING AND ABETTING FUTURE VIOLATIONS OF EXCHANGE ACT SECTION 10(B) OR RULE 10B-5. CMTC
AGREED TO PAY A CIVIL MONETARY PENALTY OF $5 MILLION AND DISGORGEMENT OF $889,773 AND PREJUDGMENT INTEREST OF $140,270. PAYMENT WAS MADE ON
MARCH 4, 2005.
14. Provide a brief summary of circumstances related to the action(s), allegation(s), disposition(s) and/or finding(s) disclosed above (your response must fit within the space
provided).
ON JANUARY 14, 2005, CMTC (AN ENTITY THAT IS 50 PERCENT OWNED BY MELLON CANADA HOLDING COMPANY) SUBMITTED A CONSENT TO ENTRY OF JUDGMENT (THE
"CONSENT") WHILCH WAS PRESENTED BY THE SEC IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA (THE"COURT")ON FEBRUARY 16, 2005. IN THE
CONSENT, AND SOLELY FOR THE PURPOSE OF INJUNCTIVE ACTION AND ANY OTHER PROCEEDINGS ARISING OUT OF THE SEC'S INVESTIGATION BROUGHT BY OR ON BEHALF OF
THE SEC,OR TO WHICH THE SEC IS A PARTY, CMTC CONSENTED TO THE ENTRY OF FINAL JUDGMENT AS TO DEFENDANT CMTC (THE "FINAL JUDGMENT") WITHOUT ADMITTING OR
DENYING THE MATTERS SET FORTH THEREIN (OTHER THAN THOSE RELATING TO THE JURISDICTION OF THE COURT AND THE SUBJECT MATTER OF THE ACTION). THE FINAL
JUDGMENT RESOLVED THE ALLEGATIONS SET FORTH IN A COMPLAINT FILED BY THE SEC, DESCRIBED IN 7, ABOVE. THE COURT ENTERED THE FINAL JUDGMENT ON FEBRUARY 24,
2005. IN ADDITION TO THE PAYMENT OF A CIVIL MONETARY PENALTY AND DISGORGEMENT, CMTC CONSENTED TO THE ENTRY OF AN SEC ADMINISTRATIVE ORDER BASED ON THE
FINAL JUDGMENT THAT CENSURED IT AND TO AN UNDERTAKING TO ENGAGE AN INDEPENDENT CONSULTANT TO REVIEW ITS RELEVANT BUSINESSES AND PROCEDURES.civil judicial · block 2PDF pages 93–94
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Item 11.H. of Part 1A or Item 2.F. of Part 1B
of Form ADV.
Civil Judicial
Check Part 1A item(s) being responded to:
11.H(1)(a)
11.H(1)(b)
11.H(1)(c)
11.H(2)
Check Part 1B item(s) being responded to:
2.F(1)
2.F(2)
2.F(3)
2.F(4)
2.F(5)
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution
Page.
One event may result in more than one affirmative answer to Item 11.H. of Part 1A or Item 2.F. of Part 1B. Use only one DRP to report details related to the same event. Unrelated
civil judicial actions must be reported on separate DRPs.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
CRD
Number:
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
THE BANK OF NEW YORK MELLON
CORPORATION
(For individuals, Last, First, Middle)
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for
registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.H.(1)(a), and only if that
event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten
years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the
event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Court Action initiated by: (Name of regulator, foreign financial regulatory authority, SRO, commodities exchange, agency, firm, private plaintiff, etc.)
ATTORNEY GENERAL FOR THE STATE OF FLORIDA
2.
Principal Relief Sought:
Civil Penalty(ies)/Fine(s)
Other Relief Sought:
MONEY DAMAGES
3.
Filing Date of Court Action (MM/DD/YYYY):
08/11/2011
Exact
Explanation
If not exact, provide explanation:
4.
Principal Product Type:
Other
Other Product Types:
FOREIGN EXCHANGE SERVICES
5.
Formal Action was brought in (include name of Federal, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case Number):
CIRCUIT COURT OF SECOND JUDICIAL CIRCUIT AND IN FOR LEON COUNTY, FLORIDA - CASE # 2009 CA 4140
6.
Advisory Affiliate Employing Firm when activity occurred which led to the civil judicial action (if applicable):
NOT APPLICABLE
7.
Describe the allegations related to this civil action (your response must fit within the space provided):
THE LAWSUIT ALLEGES THAT THE BANK OF NEW YORK MELLON CORPORATION ("BNY MELLON") IMPROPERLY CHARGED AND REPORTED PRICES FOR STANDING INSTRUCTION
FOREIGN EXCHANGE ("FX") TRANSACTIONS EXECUTED IN CONNECTION WITH CUSTODY SERVICES PROVIDED BY BNY MELLON. THE REGISTRANT IS NOT A DEFENDANT TO THIS
ACTION.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, action appealed to (provide name of court) and Date Appeal Filed (MM/DD/YYYY):
10. If pending, date notice/process was served (MM/DD/YYYY):
08/11/2011
Exact
Explanation
If not exact, provide explanation:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 14 only.
11. How was matter resolved:
Dismissed
12. Resolution Date (MM/DD/YYYY):
11/18/2013
Exact
Explanation
If not exact, provide explanation:
13. Resolution Detail:
A. Were any of the following Sanctions Ordered or Relief Granted(check appropriate items)?
Monetary/Fine Amount: $
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions:
C.
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal,
etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition
has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement, or monetary compensation, provide total amount, portion levied against you or an
advisory affiliate, date paid and if any portion of penalty was waived:
14. Provide a brief summary of circumstances related to the action(s), allegation(s), disposition(s) and/or finding(s) disclosed above (your response must fit within the space
provided).
ON AUGUST 11, 2011, THE FLORIDA ATTORNEY GENERAL'S OFFICE FILED A COMPLAINT IN INTERVENTION IN A QUI TAM ACTION FILED AGAINST BNY MELLON, THE PARENT
COMPANY OF THE REGISTRANT. BNY MELLON BELIEVES THAT THE CLAIMS ASSERTED IN THE ACTIONS ARE WITHOUT MERIT, AND REFLECT A FUNDAMENTAL MISUNDERSTANDING
OF THE ROLE OF CUSTODIAN BANKS AND THE OPERATION OF INSTITUTIONAL FX MARKETS. BNY MELLON PLANS TO DEFEND ITSELF VIGOROUSLY ON BEHALF OF ITS
SHAREHOLDERS. ON NOVEMBER 18, 2013, THE FLORIDA ATTORNEY GENERAL'S OFFICE DISMISSED THE FLORIDA LAWSUIT WITH PREJUDICE BY AGREEMENT OF THE PARTIES.civil judicial · block 3PDF pages 94–96
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Item 11.H. of Part 1A or Item 2.F. of Part 1B
of Form ADV.
Civil Judicial
Check Part 1A item(s) being responded to:
11.H(1)(a)
11.H(1)(b)
11.H(1)(c)
11.H(2)
Check Part 1B item(s) being responded to:
2.F(1)
2.F(2)
2.F(3)
2.F(4)
2.F(5)
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution
Page.
One event may result in more than one affirmative answer to Item 11.H. of Part 1A or Item 2.F. of Part 1B. Use only one DRP to report details related to the same event. Unrelated
civil judicial actions must be reported on separate DRPs.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
CRD
Number:
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
THE BANK OF NEW YORK MELLON
CORPORATION
(For individuals, Last, First, Middle)
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for
registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.H.(1)(a), and only if that
event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten
years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the
event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Court Action initiated by: (Name of regulator, foreign financial regulatory authority, SRO, commodities exchange, agency, firm, private plaintiff, etc.)
ATTORNEY GENERAL OF THE COMMONWEALTH OF VIRGINIA
2.
Principal Relief Sought:
Civil Penalty(ies)/Fine(s)
Other Relief Sought:
MONETARY DAMAGES
3.
Filing Date of Court Action (MM/DD/YYYY):
08/11/2011
Exact
Explanation
If not exact, provide explanation:
4.
Principal Product Type:
Other
Other Product Types:
FOREIGN EXCHANGE SERVICES
5.
Formal Action was brought in (include name of Federal, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case Number):
CIRCUIT COURT FOR COUNTY OF FAIRFAX, VIRGINIA - CASE # CL-2009-15377
6.
Advisory Affiliate Employing Firm when activity occurred which led to the civil judicial action (if applicable):
NOT APPLICABLE
7.
Describe the allegations related to this civil action (your response must fit within the space provided):
THE LAWSUIT ALLEGES THAT THE BANK OF NEW YORK MELLON CORPORATION ("BNY MELLON") IMPROPERLY CHARGED AND REPORTED PRICES FOR STANDING INSTRUCTION
FOREIGN EXCHANGE ("FX") TRANSACTIONS EXECUTED IN CONNECTION WITH CUSTODY SERVICES PROVIDED BY BNY MELLON. THE REGISTRANT IS NOT A DEFENDANT TO THIS
ACTION.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, action appealed to (provide name of court) and Date Appeal Filed (MM/DD/YYYY):
10. If pending, date notice/process was served (MM/DD/YYYY):
08/11/2011
Exact
Explanation
If not exact, provide explanation:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 14 only.
11. How was matter resolved:
Dismissed
12. Resolution Date (MM/DD/YYYY):
11/09/2012
Exact
Explanation
If not exact, provide explanation:
13. Resolution Detail:
A. Were any of the following Sanctions Ordered or Relief Granted(check appropriate items)?
Monetary/Fine Amount: $
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions:
NONE
C.
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal,
etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition
has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement, or monetary compensation, provide total amount, portion levied against you or an
advisory affiliate, date paid and if any portion of penalty was waived:
NOT APPLICABLE
14. Provide a brief summary of circumstances related to the action(s), allegation(s), disposition(s) and/or finding(s) disclosed above (your response must fit within the space
provided).
ON AUGUST 11, 2011, THE VIRGINIA ATTORNEY GENERAL'S OFFICE FILED A COMPLAINT IN INTERVENTION IN A QUI TAM ACTION FILED AGAINST BNY MELLON, THE PARENT
COMPANY OF THE REGISTRANT. BNY MELLON BELIEVES THAT THE CLAIMS ASSERTED IN THE ACTIONS ARE WITHOUT MERIT, AND REFLECT A FUNDAMENTAL MISUNDERSTANDING
OF THE ROLE OF CUSTODIAN BANKS AND THE OPERATION OF INSTITUTIONAL FX MARKETS. BNY MELLON PLANS TO DEFEND ITSELF VIGOROUSLY ON BEHALF OF ITS
SHAREHOLDERS. ON NOVEMBER 9, 2012, THE COURT, WHICH HAD PREVIOUSLY DISMISSED ALL OF THE CLAIMS AGAINST BNY MELLON, DISMISSED THE LAWSUIT WITH
PREJUDICE BY AGREEMENT OF THE PARTIES.civil judicial · block 4PDF pages 96–98
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Item 11.H. of Part 1A or Item 2.F. of Part 1B
of Form ADV.
Civil Judicial
Check Part 1A item(s) being responded to:
11.H(1)(a)
11.H(1)(b)
11.H(1)(c)
11.H(2)
Check Part 1B item(s) being responded to:
2.F(1)
2.F(2)
2.F(3)
2.F(4)
2.F(5)
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution
Page.
One event may result in more than one affirmative answer to Item 11.H. of Part 1A or Item 2.F. of Part 1B. Use only one DRP to report details related to the same event. Unrelated
civil judicial actions must be reported on separate DRPs.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
CRD
Number:
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
THE BANK OF NEW YORK MELLON
CORPORATION
(For individuals, Last, First, Middle)
CRD Number:
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
BANK OF NEW YORK MELLON
(For individuals, Last, First, Middle)
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for
registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.H.(1)(a), and only if that
event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten
years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the
event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Court Action initiated by: (Name of regulator, foreign financial regulatory authority, SRO, commodities exchange, agency, firm, private plaintiff, etc.)
ATTORNEY GENERAL OF THE STATE OF NEW YORK
2.
Principal Relief Sought:
Civil Penalty(ies)/Fine(s)
Other Relief Sought:
DISGORGEMENT, MONETARY DAMAGES, RESTRAINING ORDER, INJUNCTION, RESTITUTION
3.
Filing Date of Court Action (MM/DD/YYYY):
10/04/2011
Exact
Explanation
If not exact, provide explanation:
4.
Principal Product Type:
Other
Other Product Types:
FOREIGN EXCHANGE SERVICES
5.
Formal Action was brought in (include name of Federal, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case Number):
SUPREME COURT OF THE STATE OF NEW YORK, COUNTY OF NEW YORK -INDEX NO: 09/114735
6.
Advisory Affiliate Employing Firm when activity occurred which led to the civil judicial action (if applicable):
NOT APPLICABLE
7.
Describe the allegations related to this civil action (your response must fit within the space provided):
THE LAWSUIT ALLEGES THAT THE BANK OF NEW YORK MELLON ("BNY MELLON") IMPROPERLY CHARGED AND REPORTED PRICES FOR STANDING INSTRUCTION FOREIGN
EXCHANGE ("FX") TRANSACTIONS EXECUTED IN CONNECTION WITH CUSTODY SERVICES PROVIDED BY BNY MELLON. THE REGISTRANT IS NOT A DEFENDANT TO THIS ACTION.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, action appealed to (provide name of court) and Date Appeal Filed (MM/DD/YYYY):
10. If pending, date notice/process was served (MM/DD/YYYY):
10/04/2011
Exact
Explanation
If not exact, provide explanation:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 14 only.
11. How was matter resolved:
Settled
12. Resolution Date (MM/DD/YYYY):
09/24/2015
Exact
Explanation
If not exact, provide explanation:
BNY MELLON AND THE PLAINTIFFS REACHED A SETTLEMENT IN PRINCIPLE ON MARCH 19, 2015. THE SETTLEMENT WAS APPROVED BY JUDGE LEWIS KAPLAN OF THE U.S.
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK ON SEPTEMBER 24, 2015. THE DEADLINE TO APPEAL THE APPROVAL OF THE SETTLEMENT EXPIRED ON OCTOBER
26, 2015.
13. Resolution Detail:
A. Were any of the following Sanctions Ordered or Relief Granted(check appropriate items)?
Monetary/Fine Amount: $ 167,500,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions:
C.
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal,
etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition
has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement, or monetary compensation, provide total amount, portion levied against you or an
advisory affiliate, date paid and if any portion of penalty was waived:
DETAILS INDICATED ABOVE.
14. Provide a brief summary of circumstances related to the action(s), allegation(s), disposition(s) and/or finding(s) disclosed above (your response must fit within the space
provided).
ON OCTOBER 4, 2011, THE NEW YORK ATTORNEY GENERAL'S ("NYAG")OFFICE FILED A COMPLAINT AGAINST THE BANK OF NEW YORK MELLON CORPORATION ("BNY MELLON"),
THE PARENT COMPANY OF THE REGISTRANT. THIS COMPLAINT SUPERSEDES A QUI TAM COMPLAINT FILED BY A PRIVATE RELATOR. BNY MELLON BELIEVES THAT THE CLAIMS
ASSERTED IN THE ACTIONS ARE WITHOUT MERIT, AND REFLECT A FUNDAMENTAL MISUNDERSTANDING OF THE ROLE OF CUSTODIAN BANKS AND THE OPERATION OF
INSTITUTIONAL FX MARKETS. BNY MELLON PLANS TO DEFEND ITSELF VIGOROUSLY ON BEHALF OF ITS SHAREHOLDERS. ON DECEMBER 2, 2011, THE NYAG FILED AN AMENDED
AND SUPERSEDING COMPLAINT WHICH ADDED THE BANK OF NEW YORK MELLON (THE "BANK") AS A DEFENDANT. ON MARCH 19, 2015, BNY MELLON, THE PARENT COMPANY TO
THE REGISTRANT, ANNOUNCED THAT IT HAS RESOLVED SUBSTANTIALLY ALL OF THE FOREIGN EXCHANGE ("FX")-RELATED ACTIONS CURRENTLY PENDING AGAINST BNY MELLON,
RESULTING IN A TOTAL OF $714 MILLION IN SETTLEMENT PAYMENTS. WITH REGARD TO THIS ACTION, BNY MELLON HAS REACHED A SETTLEMENT WITH THE NEW YORK
ATTORNEY GENERAL ("NYAG"), WHICH FULLY RESOLVES THE NYAG'S OCTOBER 2011 LAWSUIT REGARDING STANDING INSTRUCTION FX TRANSACTIONS IN CONNECTION WITH
CERTAIN CUSTODY SERVICES THE BANK PROVIDED PRIOR TO EARLY 2012 TO ITS CUSTODY CLIENTS. UNDER THE TERMS OF THE SETTLEMENT, WHICH HAS BEEN APPROVED BY
THE COURT, BNY MELLON PAID THE NYAG $167.5 MILLION, AFTER WHICH A NOTICE OF DISCONTINUANCE WAS SUBMITTED TO THE COURT, AND THE BANK PROVIDED
FUNCTIONALITY ALLOWING CUSTOMERS TO COMPARE PRICING FOR THE BANK'S "DEFINED SPREAD" AND "SESSION RANGE" STANDING INSTRUCTION FX PRODUCTS.civil judicial · block 5PDF pages 98–100
Full extracted filing text
Includes form instructions and options. Options shown in this text do not identify which boxes were selected.
GENERAL INSTRUCTIONS
This Disclosure Reporting Page (DRP ADV) is an
INITIAL OR
AMENDED response used to report details for affirmative responses to Item 11.H. of Part 1A or Item 2.F. of Part 1B
of Form ADV.
Civil Judicial
Check Part 1A item(s) being responded to:
11.H(1)(a)
11.H(1)(b)
11.H(1)(c)
11.H(2)
Check Part 1B item(s) being responded to:
2.F(1)
2.F(2)
2.F(3)
2.F(4)
2.F(5)
Use a separate DRP for each event or proceeding . The same event or proceeding may be reported for more than one person or entity using one DRP. File with a completed Execution
Page.
One event may result in more than one affirmative answer to Item 11.H. of Part 1A or Item 2.F. of Part 1B. Use only one DRP to report details related to the same event. Unrelated
civil judicial actions must be reported on separate DRPs.
PART I
A. The person(s) or entity(ies) for whom this DRP is being filed is (are):
You (the advisory firm)
You and one or more of your advisory affiliates
One or more of your advisory affiliates
If this DRP is being filed for an advisory affiliate, give the full name of the advisory affiliate below (for individuals, Last name, First name, Middle name).
If the advisory affiliate has a CRD number, provide that number. If not, indicate "non-registered" by checking the appropriate box.
ADV DRP - ADVISORY AFFILIATE
CRD Number:
This advisory affiliate is
a Firm
an Individual
Registered:
Yes
No
Name:
BANK OF NEW YORK MELLON
(For individuals, Last, First, Middle)
This DRP should be removed from the ADV record because the advisory affiliate(s) is no longer associated with the adviser.
This DRP should be removed from the ADV record because: (1) the event or proceeding occurred more than ten years ago or (2) the adviser is registered or applying for
registration with the SEC or reporting as an exempt reporting adviser with the SEC and the event was resolved in the adviser's or advisory affiliate's favor.
If you are registered or registering with a state securities authority , you may remove a DRP for an event you reported only in response to Item 11.H.(1)(a), and only if that
event occurred more than ten years ago. If you are registered or registering with the SEC, you may remove a DRP for any event listed in Item 11 that occurred more than ten
years ago.
This DRP should be removed from the ADV record because it was filed in error, such as due to a clerical or data-entry mistake. Explain the circumstances:
B.
If the advisory affiliate is registered through the IARD system or CRD system, has the advisory affiliate submitted a DRP (with Form ADV, BD or U-4) to the IARD or CRD for the
event? If the answer is "Yes," no other information on this DRP must be provided.
Yes
No
NOTE: The completion of this form does not relieve the advisory affiliate of its obligation to update its IARD or CRD records.
PART II
1. Court Action initiated by: (Name of regulator, foreign financial regulatory authority, SRO, commodities exchange, agency, firm, private plaintiff, etc.)
UNITED STATES ATTORNEY FOR THE SOUTHERN DISTRICT OF NEW YORK
2.
Principal Relief Sought:
Civil Penalty(ies)/Fine(s)
Other Relief Sought:
INJUNCTION
3.
Filing Date of Court Action (MM/DD/YYYY):
10/04/2011
Exact
Explanation
If not exact, provide explanation:
4.
Principal Product Type:
Other
Other Product Types:
FOREIGN EXCHANGE SERVICES
5.
Formal Action was brought in (include name of Federal, State or Foreign Court, Location of Court - City or County and State or Country, Docket/Case Number):
U.S. DISTRICT COURT, SOUTHERN DISTRICT OF NEW YORK; CASE # 11-06969
6.
Advisory Affiliate Employing Firm when activity occurred which led to the civil judicial action (if applicable):
NOT APPLICABLE
7.
Describe the allegations related to this civil action (your response must fit within the space provided):
THE LAWSUIT ALLEGES THAT THE BANK OF NEW YORK MELLON ("THE BANK") IMPROPERLY CHARGED AND REPORTED PRICES FOR STANDING INSTRUCTION FOREIGN EXCHANGE
("FX") TRANSACTIONS EXECUTED IN CONNECTION WITH CUSTODY SERVICES PROVIDED BY THE BANK. THE REGISTRANT IS NOT A DEFENDANT TO THIS ACTION.
8.
Current Status?
Pending
On Appeal
Final
9.
If on appeal, action appealed to (provide name of court) and Date Appeal Filed (MM/DD/YYYY):
10. If pending, date notice/process was served (MM/DD/YYYY):
10/24/2011
Exact
Explanation
If not exact, provide explanation:
If Final or On Appeal, complete all items below. For Pending Actions, complete Item 14 only.
11. How was matter resolved:
Settled
12. Resolution Date (MM/DD/YYYY):
09/24/2015
Exact
Explanation
If not exact, provide explanation:
BNY MELLON AND THE PLAINTIFFS REACHED A SETTLEMENT IN PRINCIPLE ON MARCH 19, 2015. THE SETTLEMENT WAS APPROVED BY JUDGE LEWIS KAPLAN OF THE U.S.
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK ON SEPTEMBER 24, 2015. THE DEADLINE TO APPEAL THE APPROVAL OF THE SETTLEMENT EXPIRED ON OCTOBER
26, 2015.
13. Resolution Detail:
A. Were any of the following Sanctions Ordered or Relief Granted(check appropriate items)?
Monetary/Fine Amount: $ 167,500,000.00
Revocation/Expulsion/Denial
Disgorgement/Restitution
Censure
Cease and Desist/Injunction
Bar
Suspension
B.
Other Sanctions:
THE BANK AGREED TO MAKE A NUMBER OF FACTUAL STATEMENTS IN CONNECTION WITH THE SETTLEMENT WITH THE U.S. ATTORNEY'S OFFICE FOR THE SOUTHERN
DISTRICT OF NEW YORK.
C.
Sanction detail: if suspended, enjoined or barred, provide duration including start date and capacities affected (General Securities Principal, Financial Operations Principal,
etc.). If requalification by exam/retraining was a condition of the sanction, provide length of time given to requalify/retrain, type of exam required and whether condition
has been satisfied. If disposition resulted in a fine, penalty, restitution, disgorgement, or monetary compensation, provide total amount, portion levied against you or an
advisory affiliate, date paid and if any portion of penalty was waived:
DETAILS INDICATED ABOVE.
14. Provide a brief summary of circumstances related to the action(s), allegation(s), disposition(s) and/or finding(s) disclosed above (your response must fit within the space
provided).
ON OCTOBER 4, 2011, THE U.S. ATTORNEY'S OFFICE FOR THE SOUTHERN DISTRICT OF NEW YORK FILED A COMPLAINT IN INTERVENTION IN A QUI TAM ACTION FILED AGAINST
BNY MELLON, THE PARENT COMPANY OF THE REGISTRANT. BNY MELLON BELIEVES THAT THE CLAIMS ASSERTED IN THE ACTIONS ARE WITHOUT MERIT, AND REFLECT A
FUNDAMENTAL MISUNDERSTANDING OF THE ROLE OF CUSTODIAN BANKS AND THE OPERATION OF INSTITUTIONAL FX MARKETS. BNY MELLON PLANS TO DEFEND ITSELF
VIGOROUSLY ON BEHALF OF ITS SHAREHOLDERS. NOTE: UPON THE FILING OF AN AMENDED COMPLAINT ON FEBRUARY 16, 2012, THE ACTION WAS EFFECTIVELY DISMISSED
AGAINST THE BANK OF NEW YORK MELLON CORPORATION ("BNYMC"). THE PLAINTIFF AGREED TO SUBSTITUTE THE BANK OF NEW YORK MELLON ("BNYM"), THE BROKER-
DEALER'S BANK AFFILIATE FOR BNYMC IN RECOGNITION THAT BNYMC IS NOT A PROPER DEFENDANT IN THIS ACTION AND BNYM IS THE PROPER PARTY. THIS SUBSTITUTION WAS
CONDUCTED WITHOUT PREJUDICE. UPDATE: ON MARCH 19, 2015, THE BANK OF NEW YORK MELLON CORPORATION, THE PARENT COMPANY TO THE REGISTRANT, ("BNY
MELLON"), ANNOUNCED THAT IT HAS RESOLVED SUBSTANTIALLY ALL OF THE FOREIGN EXCHANGE ("FX")-RELATED ACTIONS CURRENTLY PENDING AGAINST BNY MELLON AND THE
BANK, RESULTING IN A TOTAL OF $714 MILLION IN SETTLEMENT PAYMENTS. WITH REGARD TO THIS ACTION, THE BANK HAS REACHED A SETTLEMENT WITH THE U.S. ATTORNEY'S
OFFICE FOR THE SOUTHERN DISTRICT OF NEW YORK ("USAO-SDNY") WHICH FULLY RESOLVES THE USAO-SDNY'S LAWSUIT REGARDING STANDING INSTRUCTION FX
TRANSACTIONS IN CONNECTION WITH CERTAIN CUSTODY SERVICES THE BANK PROVIDED PRIOR TO EARLY 2012 TO ITS CUSTODY CLIENTS. UNDER THE TERMS OF THE
SETTLEMENT, WHICH HAS BEEN APPROVED BY THE COURT, THE BANK PAID $167.5 MILLION TO THE USAO-SDNY AND PROVIDED FUNCTIONALITY ALLOWING CUSTOMERS TO
COMPARE PRICING FOR THE BANK'S "DEFINED SPREAD" AND "SESSION RANGE" STANDING INSTRUCTION FX PRODUCTS.* Metrics are based on the latest available data, including Form ADV filings, brochures, and relationship summaries pulled from the SEC IAPD, and may be subject to change. Learn what is included in the Rialytix database. Please refer to the firm's official disclosures for the most accurate information using their CRD number. This is not investment advice.