By Sam Boughedda
The U.S. Securities and Exchange Commission fined Bloomberg $5 million in a settlement for misleading disclosures relating to its paid subscription service, BVAL.
The SEC accused the company of misleading customers regarding how it calculated the price of certain securities.
BVAL provides daily price valuations for fixed-income securities to financial services entities. The SEC found that from at least 2016 to October 2022, Bloomberg failed to disclose to customers of the paid subscription service that the valuations for specific fixed-income securities could be based on a single data input, such as broker quotes, which does not align with the methodologies it previously disclosed.
The SEC said Bloomberg's actions could have an impact on 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," commented Osman Nawaz, Chief of the SEC’s 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."