BNY Mellon agrees to pay Massachusetts $3 million over computer glitch

A Massachusetts Securities Division investigation says the firm failed to calculate net asset values on more than 1,000 funds.
FEB 29, 2016
The Bank of New York Mellon agreed to pay $3 million to Massachusetts after an investigation found a computer glitch on the firm's part failed to calculate net asset values for more than 1,000 mutual funds, according to commonwealth officials. BNY Mellon hired a third-party vendor, Pennsylvania subcontractor SunGard InvestOne, to calculate net asset values, but during a weekend in August last year, there was a malfunction because of a system upgrade. A probe by the Massachusetts Securities Division discovered that BNY Mellon did not have a backup plan, which resulted in untimely and non-uniform information being sent to funds and clients, according to officials. Financial institutions like BNY Mellon are expected to oversee their third-party vendors and have backup plans if the vendor's system fails,” Secretary of the Commonwealth William F. Galvin said in a statement. “This is particularly important when the third-party vendor performs a critical business function that impacts mom and pop investors.” “While we truly regret any confusion our clients may have experienced during the initial hours of the outage, the fact remains that BNY Mellon took decisive action during an unprecedented vendor failure to protect our clients' interests and deliver daily net asset values to the funds in accordance with their instructions,” said Kevin Heine, a BNY Mellon spokesman. He also said the firm did produce net asset values manually. BNY Mellon has since incorporated supervisory procedure changes, and has made whole any funds or investors who suffered losses.

Latest News

Why high-net-worth clients need to rethink time, health, and wealth
Why high-net-worth clients need to rethink time, health, and wealth

Hightower Signature Wealth's Andrew Connors argues proactive life planning conversations can transform client relationships and create more fulfilling retirement outcomes.

Sen. Warren presses Trump on Social Security retirement age threat
Sen. Warren presses Trump on Social Security retirement age threat

The Massachusetts Democrat is demanding answers from the White House as the trust fund insolvency date accelerates and benefit cuts loom for retirees.

Supreme Court bars activist investors from suing funds under investor law
Supreme Court bars activist investors from suing funds under investor law

Saba pushed; the justices pushed back - and the SEC keeps the gavel.

Why do retirees struggle to spend their savings? New research reveals the decumulation planning gap
Why do retirees struggle to spend their savings? New research reveals the decumulation planning gap

Survey of near-retirees and retirees finds widespread anxiety about drawing down savings, with a clear confidence boost for those who plan ahead.

Goldman, JPMorgan grant work-from-home passes as World Cup crowds threaten Wall Street commutes
Goldman, JPMorgan grant work-from-home passes as World Cup crowds threaten Wall Street commutes

Two of Wall Street's most vocal opponents of remote work are bending their own rules for the tournament.

SPONSORED Estate planning isn't a service add-on. It's your retention strategy.

As $84 trillion prepares to change hands, advisors who treat estate planning as peripheral are quietly building a sieve, not a book.

SPONSORED Why strategy matters more than performance

In volatile markets, the advisors who win aren't the ones with the best calls - they're the ones whose clients stay the course.