Bny Mellon Securities Corporation

Allegations: THE LAWSUIT ALLEGES THAT THE BANK OF NEW YORK MELLON (THE "BANK") IMPROPERLY CHARGED AND REPORTED PRICES FOR STANDING INSTRUCTION FOREIGN EXCHANGE ("FX") TRANSACTIONS EXECUTED IN CONNECTION WITH CUSTODY SERVICES PROVIDED BY THE BANK. THE REGISTRANT IS NOT A DEFENDANT TO THIS ACTION. Status: Final Summary: ON OCTOBER 4, 2011, THE NEW YORK ATTORNEY GENERAL'S ("NYAG") OFFICE FILED A COMPLAINT AGAINST THE BANK OF NEW YORK MELLON CORPORATION, THE PARENT COMPANY OF THE REGISTRANT ("BNY MELLON"). THIS COMPLAINT SUPERSEDES A QUI TAM COMPLAINT FILED BY A PRIVATE RELATOR. ON FEBRUARY 16, 2012, THE U.S. ATTORNEY'S OFFICE FOR THE SOUTHERN DISTRICT OF NEW YORK FILED A COMPLAINT AGAINST THE BANK OF NEW YORK MELLON ("THE BANK"), AN AFFILIATE OF THE REGISTRANT. ON MARCH 19, 2015, BNY MELLON ANNOUNCED THAT IT HAS RESOLVED SUBSTANTIALLY ALL OF THE FOREIGN EXCHANGE ("FX")-RELATED ACTIONS CURRENTLY PENDING AGAINST BNY MELLON AND THE BANK (TOGETHER, THE "COMPANY"), RESULTING IN A TOTAL OF $714 MILLION IN SETTLEMENT PAYMENTS. WITH REGARD TO THIS ACTION, THE COMPANY HAS REACHED A SETTLEMENT WITH THE NYAG, WHICH FULLY RESOLVES THE NYAG'S LAWSUIT REGARDING STANDING INSTRUCTION FX TRANSACTIONS IN CONNECTION WITH CERTAIN CUSTODY SERVICES THE BANK PROVIDED PRIOR TO EARLY 2012 TO ITS CUSTODY CLIENTS. UNDER THE TERMS OF THE SETTLEMENT, WHICH HAS BEEN APPROVED BY THE COURT, THE BANK PAID THE NYAG $167.5 MILLION, AFTER WHICH A NOTICE OF DISCONTINUANCE WAS SUBMITTED TO THE COURT, AND PROVIDED FUNCTIONALITY ALLOWING CUSTOMERS TO COMPARE PRICING FOR BNY MELLON'S "DEFINED SPREAD" AND "SESSION RANGE" STANDING INSTRUCTION FX PRODUCTS.

Allegations: THIS LAWSUIT ALLEGES THAT THE BANK OF NEW YORK MELLON CORPORATION ("BNY MELLON") IMPROPERLY CHARGED AND REPORTED PRICES FOR STANDING INSTRUCTION FOREIGN EXCHANGE ("FX") TRANSACTIONS EXECUTED IN CONNECTION WITH CUSTODY SERVICES PROVIDED BY BNY MELLON. PLAINTIFFS ASSERT CLAIMS FOR BREACH OF CONTRACT, FRAUD, VIOLATION OF THE OHIO DECEPTIVE TRADE PRACTICES ACT AND UNJUST ENRICHMENT. THE REGISTRANT IS NOT A DEFENDANT TO THIS ACTION. Status: Final Summary: ON MARCH 19, 2015, BNY MELLON, THE PARENT COMPANY TO THE REGISTRANT, ANNOUNCED THAT IT HAS RESOLVED SUBSTANTIALLY ALL OF THE FOREIGN EXCHANGE ("FX")-RELATED ACTIONS CURRENTLY PENDING AGAINST BNY MELLON, RESULTING IN A TOTAL OF $714 MILLION IN SETTLEMENT PAYMENTS. THIS ACTION WAS PART OF A CONSOLIDATED CUSTOMER CLASS ACTION LAWSUIT. BNY MELLON REACHED A SETTLEMENT WITH THE PLAINTIFFS IN THE CUSTOMER CLASS ACTIONS RELATED TO STANDING INSTRUCTION FX TRANSACTIONS. UNDER THIS SETTLEMENT, WHICH HAS BEEN APPROVED BY THE COURT, BNY MELLON PAID $335 MILLION.

Allegations: THIS IS A PUTATIVE CLASS ACTION ALLEGING THAT BNY MELLON IMPROPERLY CHARGED AND REPORTED PRICES FOR STANDING INSTRUCTION FOREIGN EXCHANGE TRANSACTIONS EXECUTED IN CONNECTION WITH CUSTODY SERVICES PROVIDED BY BNY MELLON. PLAINTIFF ASSERTS BREACH OF FIDUCIARY DUTY, BREACH OF CONTRACT, AND UNJUST ENRICHMENT CLAIMS. THE REGISTRANT IS NOT A DEFENDANT TO THIS ACTION. Status: Final Summary: ON MARCH 19, 2015, BNY MELLON, THE PARENT COMPANY TO THE REGISTRANT, ANNOUNCED THAT IT HAS RESOLVED SUBSTANTIALLY ALL OF THE FOREIGN EXCHANGE ("FX")-RELATED ACTIONS CURRENTLY PENDING AGAINST BNY MELLON, RESULTING IN A TOTAL OF $714 MILLION IN SETTLEMENT PAYMENTS. THIS ACTION WAS PART OF A CONSOLIDATED CUSTOMER CLASS ACTION LAWSUIT. BNY MELLON REACHED A SETTLEMENT WITH THE PLAINTIFFS IN THE CUSTOMER CLASS ACTIONS RELATED TO STANDING INSTRUCTION FX TRANSACTIONS. UNDER THIS SETTLEMENT, WHICH HAS BEEN APPROVED BY THE COURT, BNY MELLON PAID $335 MILLION.

Allegations: FINRA ALLEGED THAT, DURING THE PERIOD JANUARY 2008 THROUGH APRIL 2017, MBSC FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SUPERVISORY SYSTEM AND WRITTEN SUPERVISORY PROCEDURES REASONABLY DESIGNED TO MONITOR THE TRANSMITTAL OF FUNDS FROM CUSTOMER ACCOUNTS TO THIRD PARTIES. FINRA ALLEGED THAT THIS RESULTED IN MBSC FOLLOWING INSTRUCTIONS FROM TWO THIRD-PARTY ADVISORS TO DISBURSE APPROXIMATELY $971,289 IN EXCESS FEES TO SUCH ADVISORS FROM THE ACCOUNTS OF APPROXIMATELY 75 MBSC CUSTOMERS. FINRA ALLEGED THAT MBSC THEREBY VIOLATED NASD RULES 3010, 3012 AND 2110 AND FINRA RULES 3110, 3110(C)(2) AND 2010. Status: Final Sanction Detail: MBSC CONSENTED TO THE IMPOSITION OF A CENSURE AND RESTITUTION TO IMPACTED CUSTOMERS IN THE AMOUNT OF APPROXIMATELY $971,289 PLUS INTEREST OF APPROXIMATELY $242,955 FOR A TOTAL AMOUNT OF APPROXIMATELY $1,214,244. MBSC COMPLETED ITS RESTITUTION PAYMENTS, INCLUDING INTEREST, TO THESE CUSTOMERS ON AUGUST 31, 2018. Summary: FOLLOWING AN INTERNAL REVIEW, MBSC SELF-REPORTED TO FINRA THAT IT HAD DISCOVERED THAT TWO UNAFFILIATED INVESTMENT ADVISERS HAD CHARGED CLIENT FEES IN EXCESS OF THE AMOUNTS PERMITTED UNDER THE GOVERNING INVESTMENT MANAGEMENT AGREEMENTS. BASED UPON INSTRUCTIONS FROM THE UNAFFILIATED ADVISERS, MBSC REPORTED THAT IT: (1) DISBURSED FEES FROM ACCOUNTS OF A NUMBER OF CUSTOMERS TO THE ADVISERS THAT EXCEEDED THE FEES TO WHICH THE ADVISERS WERE ENTITLED AND (2) INTENDED TO REIMBURSE ALL AFFECTED CUSTOMERS, WITH INTEREST, FOR ANY DISBURSEMENT OF IMPROPER FEES FROM THEIR ACCOUNTS. AS A RESULT OF MBSC'S VOLUNTARY DISCLOSURE, FINRA INVESTIGATED THE MATTER. FINRA FOUND THAT MBSC: (1) FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SUPERVISORY SYSTEM, INCLUDING WRITTEN PROCEDURES, REASONABLY DESIGNED TO REVIEW AND MONITOR THE TRANSMITTALS OF FUNDS FROM CUSTOMER ACCOUNTS TO THIRD PARTY ACCOUNTS AND (2) BY VIRTUE OF THE FOREGOING, VIOLATED NASD RULES 3010, 3012 AND 2110, AND FINRA RULES 3110, 3110(C)(2) AND 2010. ON OCTOBER 18, 2018, 2018, MBSC AND FINRA SETTLED THE MATTER PURSUANT TO A LETTER OF ACCEPTANCE, WAIVER AND CONSENT (THE "AWC") ON A NEITHER-ADMIT-NOR-DENY BASIS IN WHICH MBSC CONSENTED AND AGREED TO THE IMPOSITION OF A CENSURE AND RESTITUTION TO IMPACTED CUSTOMERS IN THE AMOUNT OF APPROXIMATELY $971,289 PLUS INTEREST OF APPROXIMATELY $242,955 FOR A TOTAL AMOUNT OF APPROXIMATELY $1,214,244.

Allegations: ON 21 FEBRUARY 2019, THE UK FINANCIAL CONDUCT AUTHORITY ("FCA") FOUND THAT NEWTON INVESTMENT MANAGEMENT LIMITED ("NIM"), THROUGH THE ACTIONS OF A FORMER EMPLOYEE IN 2014 AND 2015, SHARED INFORMATION WITH THREE OTHER UK INVESTMENT ADVISERS IN RELATION TO TWO INITIAL PUBLIC OFFERINGS AND ONE PLACING BY UK ISSUERS BY DISCLOSING THE PRICE IT INTENDED TO PAY, OR ACCEPTING SUCH INFORMATION, OR BOTH, SHORTLY BEFORE THE SHARE PRICES WERE SET. THE FCA FOUND THAT PARTS OF THIS CONDUCT VIOLATED THE UK COMPETITION ACT 1998. NIM SELF-REPORTED THIS MATTER TO THE FCA FOLLOWING IDENTIFICATION OF THE ISSUE. THE FORMER EMPLOYEE'S ACTIONS CONTRAVENED NIM'S CODE OF CONDUCT AND ETHICAL STANDARDS, AND THE EMPLOYEE HAS SINCE BEEN DISMISSED. THE BANK OF NEW YORK MELLON CORPORATION ("BNYM") WAS FOUND JOINTLY AND SEVERALLY LIABLE BY REASON OF BEING NIM'S ULTIMATE PARENT COMPANY. NEITHER BNYM NOR ANY OF ITS EMPLOYEES WAS INVOLVED IN ANY ASPECT OF THE RELEVANT CONDUCT AND THERE HAS BEEN NO ALLEGATION NOR NEGATIVE FINDING BY THE FCA IN RESPECT OF THE CONDUCT OF BNYM. Status: Final Sanction Detail: NOT APPLICABLE Summary: THE FCA ISSUED THEIR DECISION ON 21 FEBRUARY 2019. THE FCA WILL PUBLISH A NON-CONFIDENTIAL VERSION OF ITS DECISION UNDER THE COMPETITION ACT 1998 IN DUE COURSE.

Allegations: THE FEDERAL RESERVE ALLEGED VIOLATIONS OF REGULATION Y OF THE BOARD OF GOVERNORS (12 C.F.R. § 225) FOR ITS REGULATORY ACCOUNTING TREATMENT OF CERTAIN ASSETS OF VARIABLE INTEREST ENTITIES (THE "VIES"). Status: Final Sanction Detail: A CIVIL MONEY PENALTY IN THE AMOUNT OF $3,000,000. BNY MELLON EFFECTED PAYMENT ON OR ABOUT JUNE 27, 2017. Summary: THIS ACTION ARISES OUT OF THE FEDERAL RESERVE'S ASSERTION THAT BNY MELLON FAILED TO PROPERLY INCLUDE APPROXIMATELY $14 BILLION OF CERTAIN ASSETS OF VARIABLE INTEREST ENTITIES (THE "VIES") IN ITS CALCULATION OF ITS RISK-BASED REGULATORY CAPITAL RATIOS. BEGINNING IN THE THIRD QUARTER OF 2010, THE FEDERAL RESERVE FOUND THAT BNY MELLON ACCOUNTED FOR THESE VIE ASSETS IN ITS "TRADING BOOK," WHEREIN IT ASSIGNED THE ASSETS A ZERO-RISK WEIGHTING UNDER A VALUE-AT-RISK MODEL. IT WAS DETERMINED THAT BNY MELLON'S REGULATORY ACCOUNTING TREATMENT OF THE VIE ASSETS WAS IMPROPER UNDER THEN-APPLICABLE BASEL I REGULATORY RISK CAPITAL RULES. AS THE FEDERAL RESERVE CONSENT ORDER RELATES, BNY MELLON DEVIATED FROM THE REGULATORY CAPITAL RULES WITHOUT THE NECESSARY AUTHORIZATION FROM THE FEDERAL RESERVE AND EXCLUDED THESE ASSETS FROM ITS REGULATORY CAPITAL RATIOS FOR NEARLY 14 QUARTERS, RESULTING IN BNY MELLON UNDERSTATING ITS RISK-WEIGHTED ASSETS AND OVERSTATING ITS RISK-BASED CAPITAL RATIOS. THE FEDERAL RESERVE FOUND THAT THIS CONDUCT REPRESENTS OR RESULTED IN UNSAFE OR UNSOUND PRACTICES, AND A VIOLATION OF REGULATION Y OF THE BOARD OF GOVERNORS (12 C.F.R. § 225). ON JUNE 26, 2017, THE FEDERAL RESERVE ANNOUNCED THAT IT HAD ASSESSED BNY MELLON A CIVIL MONETARY PENALTY IN THE AMOUNT OF $3 MILLION.

Allegations: THE SEC STAFF ALLEGED VIOLATIONS OF SECTIONS 13(B)(2)(A) & (B) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR BOOKS AND RECORDS AND INTERNAL REGULATORY ACCOUNTING CONTROL DEFICIENCIES IN CONNECTION WITH THE CALCULATION OF RISK-BASED REGULATORY CAPITAL RATIOS PRESENTED IN ANNUAL AND QUARTERLY REPORTS FILED WITH THE SEC. Status: Final Sanction Detail: A CIVIL MONEY PENALTY IN THE AMOUNT OF $6,600,000. BNY MELLON WILL EFFECT PAYMENT ON A DATE TBD. Summary: THIS ACTION ARISES OUT OF THE SEC'S ASSERTION THAT BNY MELLON FAILED TO PROPERLY INCLUDE APPROXIMATELY $14 BILLION OF CERTAIN ASSETS OF VARIABLE INTEREST ENTITIES (THE "VIES") IN ITS CALCULATION OF RISK-BASED REGULATORY CAPITAL RATIOS PRESENTED IN ANNUAL AND QUARTERLY REPORTS FILED WITH THE SEC. BEGINNING IN THE THIRD QUARTER OF 2010, THE SEC FOUND THAT BNY MELLON WAS REQUIRED TO CONSOLIDATE THE ACCOUNTS OF CERTAIN VIES - WHICH TOOK THE FORM OF COLLATERALIZED LOAN OBLIGATIONS ("CLOS") - ONTO ITS BALANCE SHEET PURSUANT TO APPLICABLE GUIDANCE ISSUED BY THE FINANCIAL ACCOUNTING STANDARDS BOARD IN JUNE 2009 (NOW CODIFIED IN ASC 810). AS A RESULT OF ASC 810, IT WAS DETERMINED THAT RISK-BASED CAPITAL RULES REQUIRED BNY MELLON TO INCLUDE THE ASSETS OF THESE VIES IN ITS RISK-WEIGHTED ASSETS FOR PURPOSES OF CALCULATING ITS REGULATORY CAPITAL RATIOS. AS THE SEC ORDER RELATES, BNY MELLON, HOWEVER, DEVIATED FROM THE REGULATORY CAPITAL RULES WITHOUT THE NECESSARY AUTHORIZATION FROM THE FEDERAL RESERVE BOARD AND EXCLUDED THESE ASSETS FROM ITS REGULATORY CAPITAL RATIOS AFTER MAKING A DETERMINATION THAT THE VIES DID NOT POSE A RISK TO THE FIRM. THE SEC FOUND THAT (1) BNY MELLON'S EXCLUSION OF THE VIES CAUSED THE FIRM TO MISREPORT ITS RISK-BASED REGULATORY CAPITAL RATIOS IN EACH OF ITS QUARTERLY AND ANNUAL REPORTS FROM THE THIRD QUARTER OF 2010 THROUGH THE FIRST QUARTER OF 2014, (2) THROUGHOUT THIS TIME PERIOD, BNY MELLON FAILED TO MAKE AND KEEP ACCURATE BOOKS AND RECORDS WITH RESPECT TO ITS RISK-WEIGHTED ASSETS AND REGULATORY CAPITAL RATIOS, AND (3) BNY MELLON ALSO FAILED TO DEVISE AND MAINTAIN A SYSTEM OF INTERNAL REGULATORY ACCOUNTING CONTROLS SUFFICIENT TO PROVIDE REASONABLE ASSURANCES THAT ITS FINANCIAL STATEMENTS WERE PREPARED IN CONFORMITY WITH APPLICABLE CRITERIA. ON JANUARY 12, 2017, THE SEC ANNOUNCED THAT IT HAD ENTERED INTO AN ADMINISTRATIVE SETTLEMENT ON A NEITHER-ADMIT-NOR-DENY BASIS WITH BNY MELLON IN WHICH BNY MELLON AGREED TO PAY $6.6 MILLION.

Allegations: THE SEC STAFF ALLEGED VIOLATIONS OF THE U.S. FOREIGN CORRUPT PRACTICES ACT IN CONNECTION WITH THE PROVISION OF A LIMITED NUMBER OF INTERNSHIPS TO RELATIVES OF SOVEREIGN WEALTH FUND OFFICIALS. Status: Final Sanction Detail: DISGORGEMENT OF $8,300,000, PREJUDGMENT INTEREST OF $1,500,000 AND A CIVIL MONEY PENALTY IN THE AMOUNT OF $5,000,000, FOR A TOTAL PAYMENT OF $14,800,000. BNY MELLON EFFECTED PAYMENT ON AUGUST 24, 2015. Summary: IN JANUARY 2011, THE ENFORCEMENT DIVISION OF THE U.S. SECURITIES AND EXCHANGE COMMISSION (THE "SEC STAFF") INFORMED SEVERAL FINANCIAL INSTITUTIONS, INCLUDING THE BANK OF NEW YORK MELLON CORPORATION ("BNY MELLON"), THAT IT HAD COMMENCED AN INQUIRY INTO CERTAIN OF THEIR BUSINESS PRACTICES AND RELATIONSHIPS WITH SOVEREIGN WEALTH FUND CLIENTS. IN THE THIRD QUARTER OF 2014, THE SEC STAFF ISSUED WELLS NOTICES TO CERTAIN CURRENT AND FORMER EMPLOYEES OF BNY MELLON, INFORMING THEM THAT THE SEC STAFF HAD MADE A PRELIMINARY DETERMINATION TO RECOMMEND ENFORCEMENT ACTION AGAINST THEM FOR ALLEGED VIOLATIONS OF THE U.S. FOREIGN CORRUPT PRACTICES ACT IN CONNECTION WITH THE PROVISION OF A LIMITED NUMBER OF INTERNSHIPS TO RELATIVES OF SOVEREIGN WEALTH FUND OFFICIALS. BNY MELLON RECEIVED A SIMILAR WELLS NOTICE IN THE FOURTH QUARTER OF 2014. ON JANUARY 23, 2015, BNY MELLON RECEIVED AN ADDITIONAL SUBPOENA FROM THE SEC EXPANDING THE SCOPE OF THE SEC'S INQUIRY INTO THE PROVISION OF INTERNSHIPS AND EMPLOYMENT OPPORTUNITIES OFFERED TO OFFICIALS AND RELATIVES OF OFFICIALS AT GOVERNMENT-RELATED ENTITIES. ON AUGUST 18, 2015, THE SEC ANNOUNCED THAT IT HAD ENTERED INTO AN ADMINISTRATIVE SETTLEMENT ON A NEITHER-ADMIT-NOR-DENY BASIS WITH BNY MELLON IN WHICH BNY MELLON AGREED TO PAY $14.8 MILLION TO RESOLVE THIS INQUIRY. IN ADDITION, THE SEC HAS INDICATED THAT IT IS NO LONGER PURSUING ANY CURRENT OR FORMER BNY MELLON EMPLOYEES IN CONNECTION WITH THIS MATTER.

Allegations: ON MAY 23, 2022, THE SECURITIES AND EXCHANGE COMMISSION ("SEC") ENTERED A SETTLEMENT ORDER, RELATING TO ALLEGED MATERIAL MISSTATEMENTS AND OMISSIONS BY BNY MELLON INVESTMENT ADVISER, INC. ("BNYMIA") CONCERNING THE CONSIDERATION OF ENVIRONMENTAL, SOCIAL, AND GOVERNANCE ("ESG") PRINCIPLES TO MAKE INVESTMENT DECISIONS FOR CERTAIN MUTUAL FUNDS ADVISED BY BNYMIA. THE SEC ALLEGED THAT BNYMIA MADE THESE REPRESENTATIONS TO MUTUAL FUND INVESTORS (IN PROSPECTUSES) AND THE FUNDS BOARDS, AS WELL AS IN WRITTEN RESPONSES TO REQUESTS FOR PROPOSALS FROM OTHER INVESTMENT FIRMS. A COPY OF THE SETTLEMENT ORDER IS AVAILABLE ON THE SEC'S WEBSITE AT HTTPS://WWW.SEC.GOV. Status: Final Sanction Detail: AS SPECIFIED IN SECTION 12.A ABOVE AND IN SECTION 13 BELOW, BNYMIA AGREED TO PAY A CIVIL PENALTY IN THE AMOUNT OF $1.5 MILLION, WHICH WAS PAID ON MAY 26, 2022. Summary: UNDER THE MAY 23, 2022 SETTLEMENT ORDER, WITHOUT ADMITTING OR DENYING THE SEC'S FINDINGS, BNYMIA WAS CENSURED AND ORDERED TO CEASE AND DESIST FROM COMMITTING OR CAUSING VIOLATIONS OF CERTAIN STATUTORY PROVISIONS OF THE INVESTMENT ADVISERS ACT OF 1940 (AND CERTAIN RULES THEREUNDER) AND THE INVESTMENT COMPANY ACT OF 1940, AND AGREED TO PAY A CIVIL PENALTY OF $1.5 MILLION TO THE SEC WITHIN 10 DAYS OF THE ENTRY OF THE ORDER. THE SETTLEMENT ORDER REFERENCES THAT, IN ACCEPTING THE ORDER, THE COMMISSION CONSIDERED REMEDIAL ACTS PROMPTLY UNDERTAKEN BY RESPONDENT AND COOPERATION AFFORDED THE COMMISSION STAFF, INCLUDING THAT, THROUGHOUT THE STAFF'S INVESTIGATION, BNYMIA PROVIDED DETAILED FACTUAL SUMMARIES AND MADE SUBSTANTIVE PRESENTATIONS ON KEY TOPICS WHICH ADVANCED THE QUALITY AND EFFICIENCY OF THE STAFF'S INVESTIGATION AND CONSERVED COMMISSION RESOURCES. THE SETTLEMENT ORDER DOES NOT AFFECT BNYMIA'S ABILITY TO MANAGE THE IMPLICATED MUTUAL FUNDS (OR ANY OTHER FUNDS). A COPY OF THE SETTLEMENT ORDER IS AVAILABLE ON THE SEC'S WEBSITE AT HTTPS://WWW.SEC.GOV.

Allegations: ON AUGUST 14, 2024, THE U.S. SECURITIES AND EXCHANGE COMMISSION ("SEC") ISSUED A SETTLED ADMINISTRATIVE ORDER IN WHICH IT FOUND THAT BNY MELLON SECURITIES CORPORATION ("BNYMSC") AND PERSHING LLC ("PERSHING") WILLFULLY VIOLATED SECTION 17(A) OF THE SECURITIES EXCHANGE ACT OF 1934 (THE "EXCHANGE ACT") AND RULE 17A-4(B) THEREUNDER. THE ORDER ALSO FOUND THAT BNYMSC AND PERSHING FAILED TO REASONABLY SUPERVISE THEIR EMPLOYEES WITHIN THE MEANING OF EXCHANGE ACT SECTION 15(B)(4)(E). SPECIFICALLY, THE ORDER FOUND THAT FROM AT LEAST JANUARY 2020 TO THE DATE OF THE ORDER, BNYMSC AND PERSHING PERSONNEL SENT AND RECEIVED TEXT MESSAGE COMMUNICATIONS ON PLATFORMS THAT WERE NOT APPROVED FOR BUSINESS PURPOSES, MANY OF WHICH WERE NOT PRESERVED BY BNYMSC OR PERSHING. IN NUMEROUS INSTANCES, BNYMSC AND PERSHING SUPERVISORS THEMSELVES COMMUNICATED USING THESE UNAPPROVED COMMUNICATION PLATFORMS. IN DETERMINING TO ACCEPT BNYMSC'S AND PERSHING'S OFFERS OF SETTLEMENT, THE SEC CONSIDERED REMEDIAL ACTS PROMPTLY UNDERTAKEN BY BNYMSC AND PERSHING AND COOPERATION AFFORDED THE COMMISSION STAFF. Status: Final Sanction Detail: BNYMSC AND PERSHING WERE (I) CENSURED; (II) ORDERED TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF EXCHANGE ACT SECTION 17(A) AND RULE 17A-4 THEREUNDER; (III) ORDERED TO PAY A PENALTY OF $40 MILLION; AND (IV) ORDERED TO COMPLY WITH CERTAIN UNDERTAKINGS, INCLUDING THE RETENTION OF AN INDEPENDENT COMPLIANCE CONSULTANT TO REVIEW THEIR POLICIES AND PROCEDURES RELATED TO ELECTRONIC COMMUNICATIONS. Summary: BNYMSC AND PERSHING CONSENTED TO ENTRY OF THE ORDER AND ADMITTED THE FACTS ALLEGED IN THE ORDER AND ACKNOWLEDGED THAT THEIR CONDUCT VIOLATED THE FEDERAL SECURITIES LAWS. THE ALLEGATIONS, DISPOSITION, FINDINGS, AND SANCTIONS OF THE ORDER ARE DESCRIBED IN ITEMS 7 AND 12.

Allegations: ON AUGUST 14, 2024, THE U.S. SECURITIES AND EXCHANGE COMMISSION ("SEC") ISSUED A SETTLED ADMINISTRATIVE ORDER IN WHICH IT FOUND THAT BNY MELLON SECURITIES CORPORATION ("BNYMSC") AND PERSHING LLC ("PERSHING") WILLFULLY VIOLATED SECTION 17(A) OF THE SECURITIES EXCHANGE ACT OF 1934 (THE "EXCHANGE ACT") AND RULE 17A-4(B) THEREUNDER. THE ORDER ALSO FOUND THAT BNYMSC AND PERSHING FAILED TO REASONABLY SUPERVISE THEIR EMPLOYEES WITHIN THE MEANING OF EXCHANGE ACT SECTION 15(B)(4)(E). SPECIFICALLY, THE ORDER FOUND THAT FROM AT LEAST JANUARY 2020 TO THE DATE OF THE ORDER, BNYMSC AND PERSHING PERSONNEL SENT AND RECEIVED TEXT MESSAGE COMMUNICATIONS ON PLATFORMS THAT WERE NOT APPROVED FOR BUSINESS PURPOSES, MANY OF WHICH WERE NOT PRESERVED BY BNYMSC OR PERSHING. IN NUMEROUS INSTANCES, BNYMSC AND PERSHING SUPERVISORS THEMSELVES COMMUNICATED USING THESE UNAPPROVED COMMUNICATION PLATFORMS. IN DETERMINING TO ACCEPT BNYMSC'S AND PERSHING'S OFFERS OF SETTLEMENT, THE SEC CONSIDERED REMEDIAL ACTS PROMPTLY UNDERTAKEN BY BNYMSC AND PERSHING AND COOPERATION AFFORDED THE COMMISSION STAFF. Status: Final Sanction Detail: BNYMSC AND PERSHING WERE (I) CENSURED; (II) ORDERED TO CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND ANY FUTURE VIOLATIONS OF EXCHANGE ACT SECTION 17(A) AND RULE 17A-4 THEREUNDER; (III) ORDERED TO PAY A PENALTY OF $40 MILLION, WHICH WAS PAID IN FULL ON AUGUST 20, 2024; AND (IV) ORDERED TO COMPLY WITH CERTAIN UNDERTAKINGS, INCLUDING THE RETENTION OF AN INDEPENDENT COMPLIANCE CONSULTANT TO REVIEW THEIR POLICIES AND PROCEDURES RELATED TO ELECTRONIC COMMUNICATIONS. Summary: BNYMSC AND PERSHING CONSENTED TO ENTRY OF THE ORDER AND ADMITTED THE FACTS ALLEGED IN THE ORDER AND ACKNOWLEDGED THAT THEIR CONDUCT VIOLATED THE FEDERAL SECURITIES LAWS. THE ALLEGATIONS, DISPOSITION, FINDINGS, AND SANCTIONS OF THE ORDER ARE DESCRIBED IN ITEMS 7 AND 12.