ALBANY, N.Y. - Bank of New York Mellon Corp. will pay $1.3 million to three states to settle an investigation into manipulative trading of auction rate securities facilitated by employees at one of the company’s subsidiaries, the New York attorney general’s office said yesterday.
Under the agreement, BNY Mellon agreed to cease any further violations of New York’s Martin Act, which prohibits deception in offering securities. The deal ends a joint investigation with the Texas State Securities Board and the Florida Office of Financial Regulation. The $1.3 million is for penalties, fees, and costs to the three states.
“Today’s announcement sends a clear message that the manipulative trading of auction rate securities in New York will not be tolerated under any circumstances,’’ New York Attorney General Eric Schneiderman said. “My office will continue to protect the integrity of New York’s global financial markets at all costs.’’
Ron Sommer, spokesman for BNY Mellon Capital Markets, successor to Mellon Financial Markets LLC that was investigated, said the company was pleased to resolve the matter, “which centered on the isolated conduct of three individuals who are no longer with the company.’’