Navigating ESG issues during the private fundraising process
SEC enforcement: BNYM and GSAM
These actions arose out of the SEC's 2021 and 2022 examination priorities
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BNY Mellon Investment Adviser, Inc.
(May 23, 2022)
BNYM was charged with material misstatements
and omissions concerning ESG considerations
used in making investment decisions for certain
mutual funds (ESG integration strategies)
First ESG enforcement action relating to ESG
disclosures made by a registered fund
BNYM settled and agreed to pay $1.5 million
penalty
Timing coincided with SEC ESG proposals
Goldman Sachs Asset Management, L.P.
(Nov. 22, 2022)
Goldman was charged with policies and
procedures violations involving two mutual funds
and a separately managed account strategy
marketed as ESG investments
Similar to BNYM with focus on statements by
adviser about the specific implementation of ESG
factors
Goldman settled and agreed to pay a $4 million
penalty
A handful of small mutual funds had rebranded
as "ESG"
ROPES&GRAY
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