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Big SEC Fine For Misstatements re ESG

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June 3, 2022

The SEC has fined BNY Mellon $1.5m for environmental, social and governance misstatements. The penalty was for statements made from July 2018 to September 2021 claiming that all investments in certain funds had undergone an ESG quality review. The SEC found that many investments in those funds did not have an ESG quality review score. Sanjay Wadhwa, deputy director of the SEC’s Division of Enforcement and head of its Climate and ESG Task Force, commented: “Registered investment advisers and funds are increasingly offering and evaluating investments that employ ESG strategies or incorporate certain ESG criteria, in part to meet investor demand for such strategies and investments.“Here, our order finds that BNY Mellon Investment Adviser did not always perform the ESG quality review that it disclosed using as part of its investment selection process for certain mutual funds it advised.”

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