Bloomberg pays $5 million to settle SEC fees related to valuation of fixed income securities.

According to the Securities and Exchange Commission, Bloomberg Finance misled clients about its valuation of fixed income securities.

The Securities and Exchange Commission said that from 2016 to October last year, Bloomberg BVAL, which provides financial services companies with daily price estimates for fixed income securities, did not disclose that the estimates could be based on single inputs. , such as a broker quote, and not on other methodologies presented. Bloomberg agreed to pay $5 million to settle the charges, neither admitting nor denying the allegations.

The SEC said some clients, such as mutual fund providers, use BVAL prices to determine the value of bonds held in their fund. Thus, BVAL prices can influence the price at which securities are offered or traded.

“Bloomberg has taken on a critical role as a pricing service for fixed income market participants, and Bloomberg, like other pricing services, has a responsibility to provide its clients with accurate information about their pricing processes,” Osman Nawaz, chief executive said in a statement. complex financial instruments division of the SEC. “This issue highlights that we will hold service providers such as Bloomberg accountable for misrepresentations that affect investors.”

The Securities and Exchange Commission noted that Bloomberg has taken corrective action to improve BVAL.

[More: SEC eyeing firms on mortgage pricing]

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