Bank of New York Mellon has agreed to pay US$714 million to resolve substantially all of the foreign exchange-related actions currently pending against the company.
The company has reached a series of settlement agreements with the U.S. Department of Justice, the New York Attorney General, the U.S. Department of Labor, the U.S. Securities and Exchange Commission and private customer class actions.
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Collectively, these settlements fully resolve the lawsuits and enforcement matters pursued by these parties relating to certain of the standing instruction foreign exchange services that BNY Mellon provided to its custody clients prior to early 2012.
As part of the proposed settlement with the United States and the settlement with New York state, BNY Mellon admits to and accepts responsibility for conduct alleged in the civil fraud lawsuits, including that contrary to representations to clients that it provided “best rates” and “best execution,” the bank actually gave clients the worst reported interbank rates of the trading day.
“The Bank of New York Mellon’s custody clients, many of whom are public pension funds and non-profit organizations, trusted the bank to be honest about the financial services it was providing and to deal with them fairly,” says Manhattan U.S. Attorney Preet Bharara. “The bank repeatedly deceived its customers and is paying a heavy penalty for it.”
“We are pleased to put these legacy [foreign exchange] matters behind us, which is in the best interest of our company and our constituents,” says a BNY Mellon statement.
The proposed settlement of the United States’ civil fraud lawsuit and proposed settlements of the customer class action lawsuits are subject to court approval.
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