BNY Mellon fined $3 million for accounting error
The Federal Reserve Board has announced it has issued a Consent Order of Assessment of a $3 million civil money penalty against Bank of New York Mellon Corporation for unsafe and unsound accounting practices. According to the Board's press release, BNY Mellon improperly assigned a lower risk weighting to a portfolio of assets. In 2010, BNY Mellon consolidated a portfolio of collateralized loan obligations onto its balance sheet. BNY Mellon incorrectly assigned the assets a zero-risk weighting, which was improper under the rules in place at the time. As a result of its improper treatment of the portfolio BNY Mellon understated its reported risk-weighted assets and overstated its risk-based capital ratios for nearly 14 quarters.