State Pension Funds Sue BoNY Mellon over FX Charges
The Associated Press reports that the lawsuit filed in Florida contends that the bank overcharged the state for foreign currency exchanges by trading them in such a way that the state either paid too much or got paid too little. The lawsuit does not give an exact amount of how much the state was overcharged. Instead the state says the transactions cost Florida “millions.”
“Every penny that state and local employees entrust to Florida’s pension fund is hard-earned, and we will not allow Floridians’ money to be lost due to fraudulent activity,” Florida Attorney General Pam Bondi said, according to the AP. “Overcharging for foreign exchange transactions is essentially stealing, and any company that does so will be held accountable.”
The Virginia lawsuit seeks $120 million in damages. It also seeks $811.6 million in civil penalties. Florida also is seeking damages and civil penalties.
The news report said the Bank of New York Mellon holds about $54 billion in funds for the Virginia Retirement System. Florida’s system is worth some $120 billion.
Jeep Bryant, a spokesman for the New York bank, called the lawsuit “unwarranted” and said that it “reflects a flawed understanding of foreign currency markets.” He said the company will fight the claims and is confident it will prevail.