Secretary of State for Massachusetts William Galvin is investigating Bank of New York Mellon concerning a major technical glitch that caused the custodian bank to provide investors with incorrect valuations for mutual and exchange-traded funds. BNY Mellon’s (NYSE: BK) fund account system broke down for a week at the end of August, an especially inopportune time for investors and fund companies, given the historic volatility in the markets during that time frame. The glitch affected billions of dollars worth of assets.
Secretary of the Commonwealth William Galvin announced Friday he had sent letters to BNY Mellon and six mutual funds affected by the glitch, asking the companies to lay out the steps they are taking to remedy any harm suffered by investors who rely on BNY net asset valuations for trades.
“In the warp speed of trading these days computer problems can happen, but the fallout that seems only to affect large financial institutions can hit the average investor looking at his or her retirement money,” Galvin said in a statement.
The fund companies that were sent inquiries from Galvin are Goldman Sachs (NYSE: GS), Deutsche Bank (NYSE: DB), First Trust Advisors, Prudential Investments, Guggenheim Investments and Federated Investors.
Jeffrey Newman represents whistleblowers