By Lauren Pollock
Bank of New York Mellon Corp. said Thursday that it agreed to
pay $180 million to settle a foreign exchange-related class-action
lawsuit, resolving almost all of its currently pending
forex-related actions.
The settlement comes two months after the trust bank reached a
$714 million settlement to resolve allegations it defrauded pension
funds and other clients by overcharging them on currency
transactions.
The bank said it would take a pretax charge of $50 million in
the second quarter related to the latest settlement, which resolves
a suit that alleged securities law violations. Other details about
the suit weren't immediately available.
Bank of New York said the deal would resolve virtually all its
currently pending foreign exchange-related actions, with the
exception of several lawsuits brought by individual customers. It
is subject to court approval.
The larger March settlements resolved long-running lawsuits from
Manhattan U.S. Attorney Preet Bharara and New York Attorney General
Eric Schneiderman that accused the custody bank of giving some
clients worse prices on foreign currency trades than they had been
promised.
Bank of New York, which had refuted the lawsuits' allegations
since they were first filed in 2011, admitted as part of the
agreements that it told certain clients its focus was on "securing
the best possible rates" even though the prices it actually gave
those clients were close to the worst of the day, according to
settlement documents.
The bank also agreed to fire certain employees involved in the
conduct.
The lawsuits and investigations are separate from a broader
Justice Department probe into allegations that traders at top
global banks worked to manipulate foreign exchange rates to benefit
their banks' trading positions. The Justice Department announced a
settlement in that case Wednesday, ordering five global banks to
pay a combined $5.6 billion.
Write to Lauren Pollock at lauren.pollock@wsj.com
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