8-KOther Events

Bank of New York Mellon Corp 8-K Report, Corporate Update (Dec 8, 2009)

Filed December 8, 2009For Securities:BKBK-PKBNYBNY-PK

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.

Frequently Asked Questions

The primary event is the notification from the Commodity Futures Trading Commission (CFTC) that its Division of Enforcement is considering recommending a civil enforcement action against The Bank of New York Mellon Corporation (BK) concerning a loan made by its subsidiary to Sentinel Management Group, Inc.

The investigation pertains to a loan made by The Bank of New York (a subsidiary of BK) to Sentinel Management Group, Inc., which was secured by assets in Sentinel's account at the Bank. The CFTC is examining potential violations of the Commodity Exchange Act and CFTC regulations.

No, the filing explicitly states that the notice from the CFTC is neither a formal allegation nor a finding of wrongdoing. It is an indication that the Division of Enforcement is considering a recommendation to the Commission.

BK intends to respond to the CFTC by explaining why it believes an enforcement action is unwarranted. The company also states that it will vigorously defend itself if a civil enforcement action is indeed commenced.