SEC finds pricing data service lacked important disclosures (IGNITES)

The SEC fined Bloomberg for failing to notify clients about material information related to its BVAL pricing service. For a period of over six years, customers such as mutual funds using the BVAL service were not told that valuations for certain thinly traded fixed-income securities could be derived from a single data input instead of the proprietary algorithmic methodology that was disclosed. FrontLine’s Founder and President Amy Lynch, exclusively quoted, explains that Bloomberg clients pulling a valuation from BVAL at the exact moment when only one input value was available would be the ones impacted, and it would be extremely difficult for any fund group to know that this had occurred. Ms. Lynch further comments that the SEC may still be gathering additional information from the fund companies, but charges would be unlikely since the funds relied on the pricing service in accordance with the disclosures provided. See IGNITES (subscription required), “SEC Fines Bloomberg $5M Over Pricing-Service Disclosures”