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

Newsom wants nationwide billionaires tax as presidential bid may loom on the horizon
Newsom wants nationwide billionaires tax as presidential bid may loom on the horizon

“It’s time for an economic reset,” wrote the California governor, in a post on X.

Maryland regulators spank fledgling art-focused RIA Masterworks over registration snafus
Maryland regulators spank fledgling art-focused RIA Masterworks over registration snafus

Masterworks was launched in 2017 but its RIA, Masterworks Advisers, is just three years old.

Investors allege Miami operator took over $1.5 million in EB-5 scheme
Investors allege Miami operator took over $1.5 million in EB-5 scheme

One 2017 form, no broker license, and a $42 million gap they say surfaced on a webinar.

Gen X, millennials lag in retirement confidence amid knowledge gap
Gen X, millennials lag in retirement confidence amid knowledge gap

Fewer than half of Americans in their peak earning years feel on track for retirement, while many say limited financial knowledge and access to professional guidance are holding them back.

Advisor moves: Veteran-led UBS team overseeing $460 million migrates to Merrill
Advisor moves: Veteran-led UBS team overseeing $460 million migrates to Merrill

Meanwhile, Wells Fargo hauled advisors overseeing $825 million in the West Coast, while Wedbush has welcomed a seasoned professional from Stifel in California.

SPONSORED Who builds the income when the pension disappears?

Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income

SPONSORED Why direct indexing stopped being optional

Direct indexing is on pace to outgrow ETFs and mutual funds. Northern Trust's Ken Lassner explains why the advisors who get it wish they had started sooner.