US - Bank of New York Mellon is on the receiving end of yet another lawsuit surrounding its foreign currency exchange practices, this time for allegedly marking up trades executed on behalf of the Massachusetts Pension Reserves Investment Management Board (PRIM).
The bank has been named in a fraudulent activity administrative complaint issued by Massachusetts' secretary of the commonwealth, William Galvin.
The complaint filed by Galvin's office, alleges BNY Mellon's "scheme to deceive its clients and its clients' investment managers by misleading and omitting critical information with respect to its foreign exchange Standing Instruction Service."
Tens of millions were garnered in what the complaint describes as "illegal profits from exorbitant undisclosed mark ups on foreign currency exchanges".
"BNY Mellon through its fraudulent scheme, effectively stole tens of millions of dollars from Massachusetts state pensioners" over a minimum of ten years, the complaint said.
The bank denies wrongdoing.
BNY Mellon spokesman, Kevin Heine said in an emailed statement:" This administrative action recycles baseless allegations and as we've stated previously we are confident that we are right on the facts and the law.
"We provide all clients with a valuable service at competitive prices and any suggestion otherwise is simply wrong."
The complaint seeks to prevent BNY Mellon from further violating the Massachusetts Uniform Securities Act, pay back any ill-gotten gains and to pay an administrative fine.
The complaint follows the launch of separate lawsuits from New York attorney general and the United States attorney general against Bank of New York Mellon accusing it of overcharging state and nationwide pension funds on foreign exchange currency trades. (Global Pensions, 5 October 2011)
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