I would like to understand the Ukraine/US/Russia/North Stream 2 conflict and I started to wonder about the impact (or side effects) of US sanctions, since I read about the shareholder structure of Gazprom [1]:

Gazprom is held largely by two entities, the Russian Federation and the Bank of New York Mellon, which accounted for 50.23 percent and 16.7 percent, respectively.

Gazprom is THE biggest Natural gas extraction company and a "systemically important financial institution" (aka too big to fail) called BNY Mellon has a 16.7 percent stake in Gazprom. Isn't this all a huge conflict of interest? When the US government wants to take action against Russia through e.g. sanctions, one of their 30 biggest "too big to fail" banks are put at risk, because American banks are so invested in Russia?

And then the same issue with North Stream 2, according to Gazprom it should operate as quickly as possible and it would also produce revenue for at least one US bank (BNY Mellon), but the US government is against North Stream 2.

Can anyone explain if there is a conflict of interest here?

[1] https://www.statista.com/statistics/273267/shareholder-structure-of-gazprom/

  • Please note that we generally don't answer questions on this site which can only be answered by educated guesses or personal opinions. I therefore removed two sub-questions in order to prevent this question from getting closed.
    – Philipp
    Commented Feb 1, 2022 at 12:03
  • A conflict of interest for whom? Are you talking about the legal definition of conflict of interest, or something fuzzier? BNY Mellon are not directly involved in decisions on sanctions. And since the US is trying to increase LNG exports to Europe, it might benefit the US economy if NS2 is closed.
    – Stuart F
    Commented Feb 1, 2022 at 14:45
  • 1
    I’m voting to close this question because this is either a question asking for an opinion of the answerer, or a legal question about CoI, in which case it should be asked in Law
    – CGCampbell
    Commented Feb 2, 2022 at 14:36

3 Answers 3


Can anyone explain if there is a conflict of interest here?

Probably not. Though BNY Mellon appears to have a relatively large stake in Gazprom, it's not that big if you consider the amount of assets that bank manages. According to Bloomberg, Gazprom has a market cap of 102 billion US dollars. 16.7% of that is about 17 billion dollars.

Since BNY Mellon is a custodian bank, managing 16.7% of Gazprom's shares isn't the same as the bank owning all those shares. It's likely that many of Gazprom's shares are owned by others through an account at BNY Mellon. According to Wikipedia, BNY Mellon has 2.2 trillion or about 2200 billion US dollars of assets under management. As such, the exposure to Gazprom through BNY Mellon considering all the assets under their management is small, 17/2200 = 0.77%.

I think the reason BNY Mellon shows up as having such a high stake in Gazprom is because they hold many shares and in turn they issue American Depositary Receipts. According Gazprom.com:

An ADR (American Depositary Receipt) is a negotiable security issued by The Bank of New York Mellon, a U.S. depository bank, representing the Company’s ordinary shares traded in a foreign stock market. ADRs confirm the Company’s ownership of shares deposited with The Bank of New York Mellon. One ADR represents two Gazprom shares. It is possible to convert Gazprom’s ordinary shares into ADRs and vice versa.

According to Wikipedia's page on American Depositary Receipts:

Shares of many non-U.S. companies trade on U.S. stock exchanges through ADRs, which are denominated and pay dividends in U.S. dollars, and may be traded like regular shares of stock. ADRs are also traded during U.S. trading hours, through U.S. broker-dealers. ADRs simplify investing in foreign securities by having the depositary bank "manage all custody, currency and local taxes issues".

So if American investors (or others who can access US markets more easily than the Moscow / London / Berlin / Frankfurt / Singapore stock exchanges where the shares are traded directly) want to buy shares of Gazprom, they probably buy those ADRs instead. When doing so, they make up part of that 16.7% figure.

So it's not necessarily BNY Mellon that's exposed to the risk of buying Gazprom shares, it's their customers. BNY Mellon also doesn't have the voting rights that come with those shares linked to ADRs. According to Investopedia's introduction to Depositary Receipts:

The ADR investor holds privileges like those granted to shareholders of ordinary shares, such as voting rights and cash dividends. The rights of the ADR holder are stated on the ADR certificate.

All things considered, I don't think this is a particular conflict of interest. I think you can find similar situations for many companies which receive bad press or may even end up being sanctioned at some point (by the US or others).

  • May be BNY Mellon does not own all the shares, but who controls the voting rights? 17% Is enough to elect people in the management board end even if they cannot determine the company strategy they can access a lot of information about it.
    – FluidCode
    Commented Feb 2, 2022 at 13:35
  • @FluidCode edited a bit. The voting rights are held by the investors in the ADRs. As for strategy, I'm not sure if that offers much more insight compared to outsiders given that exchange-traded companies already have to disclose information. As for voting, half of the shares are owned by various Russian government agencies so I think voting by outsiders can really change its course (source: Wikipedia).
    – JJJ
    Commented Feb 2, 2022 at 13:51

It's a good question, but I don't think Bank of New York Mellon (BNY) actually has a long position in 16% of Gazprom shares -- instead it seems BNY is holding them on behalf of other US owners, to facilitate the mechanics of Gazprom being traded on US exchanges.

BNY is the account depository for Gazprom's ADR shares (US stock symbol: OGZPY). From https://www.gazprom.com/investors/stock/ :

ADR stands for an American Depositary Receipt issued against Gazprom's ordinary shares, providing for the free floating of the Company's shares in international stock markets. The Company's ADRs are deposited with The Bank of New York Mellon. ADR affirms the ownership of Gazprom's shares deposited with The Bank of New York Mellon. One ADR represents two shares of Gazprom. It is possible to convert Gazprom's ordinary shares into ADRs and vice versa.

The parties who stand to gain or lose here are the US holders of OGZPY. The top holders can be found in the public record, such as here -- note different tabs listing funds and institutions.


The simple answer is that the geostrategic interests of the United States and those of a single large investment bank are not one and the same. Any time a country pursues international conflict, it is likely to face various economic costs and risks as a result of its actions. Economic sanctions imposed by one country on another would be meaningless if trade didn't exist. Many US companies had financial stakes in Germany and other opposing countries when it joined the world wars. These decisions are complex and not made lightly.


Not the answer you're looking for? Browse other questions tagged .