Bloomberg Finance LP has been hit with a $5m SEC fine for failing to provide accurate information about the way it valued certain fixed-income securities.

The regulator found that, from at least 2016 through October 2022, “Bloomberg failed to disclose to its BVAL customers that the valuations for certain fixed-income securities could be based on a single data input, such as a broker quote, which did not adhere to methodologies it had previously disclosed”.

BVAL is Bloomberg’s paid subscription service and, says the SEC, the company was aware customers “including mutual funds, may utilize BVAL prices to determine fund asset valuations” and that “BVAL prices, therefore, can have an impact on the price at which securities are offered or traded”.

Securities Act

The SEC order found Bloomberg had violated 17(a)(2) of the Securities Act. The company has agreed to cease and desist from future violations and to pay the $5m penalty. The order takes note of the fact that Bloomberg volunteered to help implement measures to improve the service.,

“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,” said Osman Nawaz, Chief of the 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.”