According to The Boston Herald, this termination occurred just six months after accusing the financial giant of nearly $30 million in overcharges.
State Treasurer Steven Grossman, chairman of the Pension Reserve Investment Management (PRIM) board, in June, accused BNY Mellon of “excessive profiteering” on forex trades dating back a decade. The pension fund had hired a consultant to analyze the transactions handled by the custody bank.
BNY Mellon has denied the allegations, saying it provides “a valuable service at a fair price.” But the bank faces several lawsuits (see BNY Mellon Sued by U.S. and New York) including a complaint filed by Massachusetts Secretary of State William Galvin on behalf of the state pension fund.
Those lawsuits prompted former Bank of New York Mellon employees to file a lawsuit on behalf of participants in BNY Mellon’s 401(k) savings plan and Employee Stock Ownership Plan regarding the bank’s continuation of offering company stock as an investment choice in those plans (see BNY Mellon Employees File Lawsuit over Foreign Currency Trading).
The PRIM board voted to hire Russell Implementation Services. PRIM expects to save an estimated $1.2 million a year on its forex trading by hiring Russell, which is owned by Russell Investment Group of Seattle.State Street Corporation has also been accused of overcharging clients for foreign currency trades (see State Street Hit with new Forex Fraud Suit).