Summary
The Bank of New York Mellon Corporation (BK) filed an 8-K on July 6, 2012, primarily to disclose a significant settlement and provide an update on its capital position. The company reached a Stipulation of Settlement for $280 million to resolve claims related to losses from investments in Sigma Finance Inc. This settlement is subject to court approval and aims to release BNY Mellon from all Sigma-related claims by the alleged class members. The company also recorded an after-tax charge of approximately $210 million in the second quarter of 2012 related to these Sigma investments.
Key Highlights
- 1BNY Mellon entered into a $280 million settlement agreement to resolve claims arising from Sigma Finance Inc. investments.
- 2The settlement is subject to court approval and covers claims from a putative class action lawsuit.
- 3An after-tax charge of approximately $210 million was recorded in Q2 2012 due to Sigma investment-related claims.
- 4BNY Mellon provided a preliminary estimate on the impact of new Basel III risk-based capital rules.
- 5The new Basel III rules are expected to increase BNY Mellon's Basel III Tier 1 common equity ratio by over 100 basis points.
- 6As of March 31, 2012, BNY Mellon's Basel III Tier 1 common equity ratio was 7.6%.
- 7The expected increase in the capital ratio is attributed to a reduction in risk-weighted assets for BNY Mellon's securities portfolio.