Summary
This 8-K filing from The Bank of New York Mellon Corporation (BK) on December 8, 2009, primarily serves to disclose an ongoing investigation by the Commodity Futures Trading Commission (CFTC) concerning a loan made by its subsidiary, The Bank of New York, to Sentinel Management Group, Inc. (Sentinel). The loan was secured by assets held in Sentinel's account at the Bank. The CFTC's Division of Enforcement has notified the Bank that it is considering recommending a civil enforcement action against the Bank for potential violations of the Commodity Exchange Act and CFTC regulations. The Bank has received a draft of the proposed complaint and intends to present a defense arguing that an enforcement action is unwarranted. While this notification is not a formal finding of wrongdoing, it indicates a significant regulatory scrutiny that could lead to litigation.
Key Highlights
- 1BK's subsidiary, The Bank of New York, is under investigation by the CFTC regarding a loan to Sentinel Management Group, Inc.
- 2The loan in question was secured by securities and cash held in a Sentinel account at the Bank.
- 3The CFTC's Division of Enforcement has indicated it may recommend filing a civil enforcement action against BK.
- 4BK has been provided with a draft complaint outlining the potential allegations.
- 5The Bank intends to contest the potential enforcement action, asserting it is unwarranted.
- 6BK states it will vigorously defend itself if a civil enforcement action is commenced.
- 7This notice from the CFTC is not a formal finding of wrongdoing but signifies regulatory concern.