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Rating:SEC Claims BNY Mellon Email Routing List Email & Route  Print Print
Monday, June 25, 2012

SEC Claims BNY Mellon "Gouged" Fido, Others on FOREX Trades

Reported by HFD

A recent filing by the U.S. Justice Department alleges that financial firms paid millions to a unit of Bank of New York Mellon that defrauded clients on FOREX trades, reports the Boston Herald. Fidelity Investments, Manulife/John Hancock [profile], Raytheon, and Natixis [profile] are some of the companies that paid BNYM.

The Justice Department's filing states that "[t]he Bank of New York Mellon (engaged) from at least 2000 through 2011 ... in a scheme to defraud custodial clients who used BNYMís standing-instruction foreign-exchange service."

The BNYM unit generated around $1.5 billion of FOREX fees from 200 clients between 2007 and 2010, regulators said. Fidelity was one of BNYM's top customers, spending over $55 million on trades in that time.

A separate lawsuit was filed by Massachusetts officials claiming that around $29 million was spent on "questionable foreign-exchange fees."

Kevin Heine, a BNY Mellon spokesperson, said these accusations stemmed from "a fundamental misunderstanding of the foreign-exchange market." 

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