The Securities and Exchange Commission's position is that Bloomberg is so influential in relation to valuations that it must be held to the highest standards.
"“Bloomberg has assumed a critical role as a pricing service to participants in the fixed-income markets and it is incumbent on Bloomberg, as well as on other pricing services, to provide accurate information to their customers about their valuation processes,” said Osman Nawaz, Chief of the Division of Enforcement’s Complex Financial Instruments Unit. “This matter underscores that we will hold service providers, such as Bloomberg, accountable for misrepresentations that [affect] investors.”
According to the Order, from at least 2016 auntil the end of October 2022, Bloomberg failed to disclose to its BVAL customers that the valuations for certain fixed-income securities could be based on a single data input, such as a broker quote, which did not adhere to methodologies it had previously disclosed. As a result, the SEC found, Bloomberg was aware that its customers, including mutual funds, may use BVAL prices to determine fund asset valuations including for valuing fund investments in government, supranational, agencies and corporate bonds, municipal bonds and securitised products and that BVAL prices, therefore, can have an impact on the price at which securities are offered or traded.
There was no allegation of market manipulation and the settlement was reached without admission or delial of te findings. Bloomberg took steps to remedy the situation, the SEC said.