$714 million settlement by BNY Mellon for FX lawsuits

Bank of New York Mellon Corp (NYSE:BK) has agreed to settle allegations brought in a lawsuit against the bank that it overcharged pension funds and other clients for FX services.

US Federal and New York State authorities were part of a series of parties which made allegations against the financial giant, claiming that BNY Mellon promised best possible execution for institutional clients’ FX transactions, but instead of carrying this out, provided either the worst interbank rate, or a price close to the worst interbank rate.

Best execution practice has been highlighted as a regulatory priority recently, with the British Financial Conduct Authority (FCA) having produced a report in the form of a thematic review on execution practices last year, highlighting several causes for concern.

According to New York State and Federal authorities, BNY Mellon took responsibility for its actions and has also agreed to end the employment of David Nichols, who held the position of Head of Products Management.

According to a report in Fortune, Manhattan U.S. Attorney Preet Bharara stated that “The bank repeatedly deceived its customers and is paying a heavy penalty for it.”

BNY Mellon said that it resolved substantially all the foreign exchange-related actions pending as part of the $714 million, including by the U.S. Department of Labor, the U.S. Securities and Exchange Commission and class action litigation.

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