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In the Matter of BNY Mellon Securities LLC Admin. Proc. File No. 3-14191

Aug. 29, 2022

In the Matter of Mark Shaw
Admin. Proc. File No. 3-14192

On January 14, 2011, the Commission instituted and simultaneously settled related administrative proceedings (together, the “Orders”) against BNY Mellon Securities LLC (“BNY”) and Mark Shaw (“Shaw”) (collectively, the “Respondents”), its manager on its institutional order desk. In the Orders, the Commission found that, from November 1999 through March 2008, Shaw manipulated time delays in systems for executing agency cross trades on a regional exchange to advantage a handful of accounts held by individuals and hedge funds at the expense of accounts belonging to various employee stock purchase plans, employee stock option plans, direct purchase and sale plans, and similar plans, and directed traders under his supervision to do the same. The Commission also found that BNY failed to reasonably supervise Shaw during this time. See the Commission’s Orders: Release No. 34-63724 and 33-9174.

In the Orders, the Commission ordered the Respondents to pay a total of $24,414,038.00 in disgorgement, prejudgment interest, and civil money penalties to the Commission. The Commission also created fair funds, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, as amended, and ordered for them to be combined into a single fair fund, so the penalties, along with the disgorgement and interest, could be distributed to harmed investors (the “Fair Fund”).

On January 31, 2013, the Commission published a notice of the proposed plan of distribution and opportunity for comment and simultaneously published the proposed plan of distribution (“Proposed Plan”). The Proposed Plan proposed Boston Financial Data Services, Inc. (“BFDS”) as the Fund Administrator to oversee the administration and distribution of the Fair Fund. The notice provided the public with 30 days to submit their comments on the Proposed Plan.  See the Commission’s Notice: Release No. 34-68796 and the Proposed Plan

On February 28, 2014, the Commission issued an order that approved the modified plan of distribution (“Plan”), appointed BFDS as the Fund Administrator, and set the administrator’s bond amount.  See the Commission’s Order: Release No. 34-71638 and the Plan

On September 3, 2014, the Commission issued an order directing the disbursement of $18,265,971.49 from the Fair Fund for distribution to harmed investors in accordance with the Plan. See the Commission’s Order: Release No. 34-72962.

On September 7, 2018, the Commission issued an order directing a second disbursement of the Fair Fund. See the Commission's Order: Rel. No. 34-84508.

The distribution in this matter was closed on March 20, 2023 when the Commission approved the final accounting and issued an order transferring any remaining or future funds to the U.S. Treasury, discharging the Fund Administrator, canceling the Fund Administrator’s bond, and terminating the Fair Fund. See the Commission’s Order: Release No. 34-97172.

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