By Chris Prentice
NEW YORK (Reuters) - Bloomberg Finance LP has agreed to pay a $5 million fine to settle charges from the U.S. Securities and Exchange Commission (SEC) over "misleading" disclosures relating to its paid subscription service, the regulator said on Monday.
Bloomberg failed to disclose to customers of its BVAL service that its daily price valuations for fixed-income securities could be based on a single data input from at least 2016 to October 2022, the SEC said in a statement. That practice did not adhere to methodologies the firm had previously disclosed, the agency said.
Bloomberg did not admit or deny the SEC's charges and a spokesperson for the company declined to comment. In addition to paying the penalty, the firm agreed to cease and desist from future violations.
Mutual funds and other customers use BVAL prices to set the value of their investments in corporate and municipal bonds and securitized products, according to the SEC. While it found no evidence Bloomberg listed any erroneous prices, the agency said there were instances when its valuations were not derived in accordance with its stated methodologies.
For a "very small fraction of total reported valuations", Bloomberg determined prices of certain fixed income securities based on "uncorroborated single broker quotes", the SEC's order said.
The SEC "will hold service providers, such as Bloomberg, accountable for misrepresentations that impact investors," said Osman Nawaz, chief of the SEC enforcement division's complex financial products unit.
(Reporting by Chris Prentice; Editing by David Gregorio)