Bloomberg Finance LP has agreed to pay a $5 million penalty to settle charges from the U.S. Securities and Exchange Commission (SEC) over “misleading” disclosures regarding its paid subscription service, the regulator said on Monday.
Notably, Bloomberg did not make known to customers of its BVAL service that its daily price valuations for fixed-income securities could be based on a single data input from at least 2016 to October last year, the SEC said in a statement. That practice did not comply with methodologies the firm had previously communicated, the agency said.
Bloomberg did not confess or deny the SEC’s charges and a spokesperson for the firm would not comment. Apart from paying the penalty, the company agreed to cease and abstain from future violations.
Mutual funds and other customers use BVAL prices to fix the value of their investments in municipal and corporate bonds and securitized products, according to the SEC. While it found no proof Bloomberg listed any incorrect prices, the agency said there were cases when its valuations were not derived in line with its stated methodologies.
Buy Crypto NowFor a “very small fraction of total reported valuations”, Bloomberg decided prices of certain fixed-income securities based on “uncorroborated single broker quotes”, the SEC’s ruling said.
The SEC “will hold service providers, such as Bloomberg, accountable for misrepresentations that impact investors,” said Osman Nawaz, chief of the SEC enforcement division’s complex financial products unit.
