Former mayor of Latest York Michael Bloomberg speaks during a gathering with Earthshot prize winners and finalists on the Glasgow Science Center through the UN Climate Change Conference (COP26) in Glasgow, Scotland, Britain, November 2, 2021.
Alastair Grant | Reuters
The Securities and Exchange Commission fined Bloomberg Finance LP $5 million to settle civil charges accusing the corporate of misleading customers on the way it calculated the costs of certain securities, the agency said Monday.
The SEC found that the corporate did not disclose the methodologies it used to value certain fixed-income securities to users of its paid subscription service, BVAL, from at the least 2016 through October 2022.
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A few of the prices were based on only one data point, like a single broker quote, the agency said, which didn’t follow the methodologies it previously said it used to calculate valuations. The motion could have affected the value at which securities are offered or traded on the platform, the SEC said.
Former Latest York mayor and one-time presidential candidate Mike Bloomberg owns the parent company Bloomberg LP, an information and media company.
Bloomberg declined to comment on the settlement. A spokesperson directed CNBC to language from the SEC’s stop and desist order which states “there isn’t a evidence that BVAL’s prices were erroneous or not reflective of the market” through the relevant period. But, the agency found instances where valuations weren’t derived in line with publicly available methodologies.
“Bloomberg has assumed a critical role as a pricing service to participants within the fixed-income markets and it’s incumbent on Bloomberg, in addition to on other pricing services, to offer accurate information to their customers about their valuation processes,” said Osman Nawaz, chief of the SEC’s division of enforcement’s complex financial instruments unit. “This matter underscores that we are going to hold service providers, resembling Bloomberg, accountable for misrepresentations that impact investors.”
The SEC said Bloomberg’s customers, including mutual fund corporations, used its prices to calculate valuations of their very own holdings. The disclosure issue affected the costs of some government bonds, agency securities, corporate bonds, municipal bonds in addition to securitized products, the SEC said.
