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BNY Mellon Investment Adviser agreed to settle Securities and Exchange Commission (SEC) charges for “misstatements and omissions” about ESG considerations in making investment decisions for six mutual funds it managed.
The SEC’s order found that, from July 2018 – September 2021, BNY Mellon represented or implied in various statements that all investments in its funds had undergone an ESG quality review, even though that was not always the case.
“Numerous” investments held by certain funds “did not have an ESG quality review score as of the time of investment,” the SEC said.
In the Monday announcement, the U.S. regulator revealed that BNY Mellon agreed to a cease-and-desist order, a censure, and to pay a $1.5 million penalty to settle charges, although the adviser did not admit to or deny the charges.
“Investors are increasingly focused on ESG considerations when making investment decisions,” said Adam Aderton, co-chief of the SEC Enforcement Division’s Asset Management Unit, in a press release. “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.”