BNY Mellon to Pay $1.14M Securities Lawsuit Settlement
By Andrea Gressman
It was recently reported that the Bank of New York Mellon (NYSE: BK) recently settled a securities lawsuit filed against them by Virginia’s employee pension fund. It was originally alleged that BNY was charging the pension fund the high price listed on trading day when they should have charged the inter-bank rate as this is what currencies are originally purchased at. Subsequently, a securities fraud lawsuit was filed and a settlement reached.
The terms of the BNY Mellon securities lawsuit settlement stipulate that there will be a payment of $1.14 million to the man that was working as the foreign exchange trader, Grant Wilson, as he is the one who made the allegations to begin with. It is also stipulated that the securities lawsuit will be terminated against Bank of New York Mellon by Virginia.
As an additional term, Bank of New York Mellon also reached a 5-year custody arrangement with the retirement system in Virginia. According to the terms of the Bank of New York Mellon securities settlement, BNY will continue to offer custody, foreign-exchange, and securities services to the retirement system for Virginal at fees of a lower amount. The settlement deal also includes the option to renew every 5 years.
The Original Securities Lawsuit Against BNY Mellon
In 2011, the Bank of New York Mellon was accused of failing to provide the best pricing possible while conducting foreign currency trades for the pension funds in Virginia. As a result, a securities lawsuit was filed by the attorney general for Virginia. There were actually three charges leveled against the company but two of them were dismissed shortly after the filing of the securities lawsuit. Then in 2012 the rest of the charges were dismissed with the judge claiming that a securities lawsuit filed under the Virginia Attorney General against the Taxpayers Act was not possible because there had been no payment. He went on to say that Bank of New York Mellon had only given Virginia past accounting statements.
This securities lawsuit settlement happens to be just the start of a series of securities lawsuits BNY is currently facing. Other states including Florida, New York, California, Massachusetts, and Ohio have all filed securities allegations against Bank of New York Mellon as well. Some of their allegations include misleading public and state pension funds, those of private companies as well as universities, as well as the banks via a scheme claiming that the bank was overcharging for foreign currency transactions.
Bank of New York Mellon is not alone in receiving these accusations by various states across the Unites States for overcharging in different pension funds. In 2009, the state of California filed a securities lawsuit against State Street Corp. (STT) for pricing foreign exchange in an improper manner in regards to the California pension fund as well.
Were you a victim of stock fraud, securities fraud or investment fraud? You may have a case to file class action lawsuit against the parties responsible. Visit the Securities Fraud, Stock Fraud Investment Class Action Lawsuit Investigation for details.
Updated January 8th, 2013
All securities fraud class action and lawsuit news updates are listed in the Stocks & Securities section of Top Class Actions
