Finra Cites Pershing’s Failure in Supervising Variable Rate Securities Data

  • Pershing fined $1.4 million by Finra for providing inaccurate interest-rate information to clients
  • Over a 12-year period, Pershing distributed over one million statements and trade confirmations with incorrect data
  • The firm failed to establish proper procedures to supervise interest-rate info dissemination
  • Pershing relied on another company for foreign issuer information, which failed to update rates for 13,000 securities

Financial industry regulator Finra fined Pershing LLC, a unit of Bank of New York Mellon, $1.4 million for distributing incorrect interest-rate information on variable rate securities over a 12-year period. The firm distributed more than one million account statements and trade confirmations with inaccurate data. Finra’s disciplinary report states that Pershing failed to investigate the cause of inaccuracies or whether they were widespread when customers notified them. Pershing relied on another company for foreign issuer information, which didn’t update rates for 13,000 securities.

Factuality Level: 8
Factuality Justification: The article provides accurate and objective information about the fine imposed on Pershing by Finra for providing inaccurate interest-rate information to clients over a 12-year period. It also includes details about the nature of the inaccuracies and the firm’s response to them. The source is cited, and there is no apparent sensationalism or personal perspective presented as fact.
Noise Level: 3
Noise Justification: The article provides relevant information about a financial organization being fined for providing inaccurate interest-rate information to clients over a long period and highlights the regulatory actions taken against them. It also includes a statement from Pershing acknowledging their responsibility and the cause of the issue. However, it could provide more context on the impact on customers and the broader implications of this incident.
Public Companies: Bank of New York Mellon (BK)
Private Companies: Pershing
Key People: Pershing representative (Representative)

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Financial Relevance: Yes
Financial Markets Impacted: Banking and investment industry
Financial Rating Justification: The article discusses a fine imposed on Pershing, a unit of Bank of New York Mellon, for providing inaccurate interest-rate information to clients over a 12-year period. This impacts the banking and investment industry as it involves a major custodian of assets for registered investment advisors with $2.6 trillion in assets under administration.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the article.

Reported publicly: www.barrons.com