SEC fines BNY Mellon $1.5mn for ESG claims

BNY Mellon Investment Adviser has agreed to pay a $1.5mn fine after being charged by the US The Securities and Exchange Commission.

The fine was agreed after the SEC charged BNY Mellon for “Misstatements and omissions about ESG considerations in making investment decisions for certain mutual funds that it managed.”

The SEC found that from July 2018 to September 2021, BNY Mellon Investment Adviser, “Represented or implied in various statements that all investments in the funds had undergone an ESG quality review, even though that was not always the case. The order finds that numerous investments held by certain funds did not have an ESG quality review score as of the time of investment.”

Sanjay Wadhwa, Deputy Director of the SEC’s Division of Enforcement and head of its Climate and ESG Task Force said, “…Our order finds that BNY Mellon Investment Adviser did not always perform the ESG quality review that it disclosed using as part of its investment selection process for certain mutual funds it advised.”

Adam S. Aderton, Co-Chief of the SEC Enforcement Division’s Asset Management Unit and a member of the Task Force said, “As this action illustrates, the Commission will hold investment advisers accountable when they do not accurately describe their incorporation of ESG factors into their investment selection process.”