The company recorded an after-tax charge in the second quarter of 2012 of approximately $210m ($350m pre-tax) primarily related to claims involving Sigma investments. This charge includes in part the expected payment of $280m settling the Sigma-related class action.
'The Sigma settlement agreement reflects the meaningful progress we are making in navigating the litigation environment that affects our company and the industry overall. We are putting this litigation behind us, with no significant impact on our capital position, while continuing to make headway on other matters', said Gerald L. Hassell, chairman, president and Chief Executive Officer of BNY Mellon.
Separately, the company noted that, after a preliminary review of the recently released Basel III rulemaking, it estimates that the impact of the new rules will be to increase its Basel III Tier 1 common equity ratio by over 100 basis points. The Basel III Tier 1 common equity ratio as of March 31, 2012 was 7.6%. The expected increase is primarily due to the estimated reduction in risk-weighted assets related to the company’s securities portfolio.