The Securities and Exchange Commission (SEC) announced settled charges against Bloomberg for misleading disclosures relating to its paid subscription service BVAL – with the firm agreeing to pay a $5 million penalty.
According to the SEC, Bloomberg’s BVAL which provides daily price valuations for fixed-income securities to financial services entities, failed to disclose that the valuations for specific fixed-income securities could be based on a single data input, which did not adhere to methodologies it previously disclosed.
The SEC found that these misleading disclosures took place from at least 2016 to October 2022.
The watchdog’s order found that Bloomberg was aware that its customers, including mutual funds, may utilise BVAL prices to determine fund asset valuations and that consequently, BVAL prices could impact the price at which securities are offered or traded.
“Bloomberg has assumed a critical role as a pricing service to participants in the fixed-income markets and it is incumbent on Bloomberg, as well as on other pricing services, to provide accurate information to their customers about their valuation processes,” said Osman Nawaz, chief of the Division of Enforcement’s complex financial instruments unit.
“This matter underscores that we will hold service providers, such as Bloomberg, accountable for misrepresentations that impact investors.”
Bloomberg agreed to cease and desist from future violations and to pay a penalty of $5 million, without admitting or denying the SEC’s findings.
According to the SEC’s order, Bloomberg voluntarily engaged in remedial efforts to make improvements to its BVAL line of business.