WASHINGTON (Reuters) -The U.S. Securities and Exchange Commission (SEC) on Monday said BNY Mellon Investment Adviser had paid $1.5 million to resolve charges it misstated environmental, social and governance (ESG)investment policies for some mutual funds it managed.
The SEC said that from July 2018 to September 2021, BNY Mellon Investment Adviser represented or implied in various statements that all investments in the funds had undergone an ESG quality review, even though that was not always the case.
“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,” said Sanjay Wadhwa, Deputy Director of the SEC’s Division of Enforcement and head of its Climate and ESG Task Force.
“Here, we allege 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.”
The firm did not admit or deny the SEC’s findings, the SEC said, but agreed to a cease-and-desist order, a censure, and to pay the penalty, the agency said.
“BNY Mellon Investment Adviser is pleased to resolve this matter concerning certain statements it made about the ESG review process for six U.S. mutual funds,” a spokesperson said in a statement, adding that the firm takes seriously its regulatory and compliance responsibilities.
BNY Mellon Investment Adviser also “promptly undertook remedial acts and cooperated with Commission staff in its investigation,” the SEC said.