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Bank of New York to pay $250,000 regulator penalty

The Bank of New York has agreed to pay $250,000 to US financial regulators over claims that it failed to adequately keep track of lost shareholders.

The US's oldest bank incurred the wrath of the Securities and Exchange Commission (SEC) after it failed to carry out the necessary procedures to find over 14,000 security holders who could not be contacted by the bank.

As a registered transfer agent, recording stock and bond trades, the Bank of New York is obliged to make reasonable efforts in tracking down security holder whose mail is deemed 'undeliverable', due to a change of address.

The SEC says that the bank classified $11.5 million worth of assets belonging to the lost customers as lost property, handing it over to the state.

This meant that customers had to pay fees in order to recover their assets.

The Bank of New York agreed to pay the fine without admitting or denying the charges, although they agreed to reimburse and fees paid to third parties.

Jeep Byant, a Bank of New York spokesman, said: "We are pleased that the matter has been resolved and is now behind us."