Bank of New York Mellon Corp (NYSE:BK) has entered into discussions with the New York Attorney General Eric Schneiderman and the US Department of Justice due to claims the bank defrauded clients in foreign exchange transactions, according to a report by Reuters.
Whilst BNY Mellon was excluded from the high profile global investigation into FX benchmark manipulation which concluded in November 2014 with six banks having been fined $4.3 billion between them, it faces a series of lawsuits, some of which are class actions, which orignated from allegations that BNY Mellon misled clients about how it determined currency exchange rates for certain transactions.
In November last year, BNY Mellon fired a London-based currency trader after the bank found that his electronic communications breached its compliance rules, representing the first dismissal of this kind within the company.
Reuters continued to report that the Department of Justice, which has a lawsuit against BNY Mellon pending in Manhattan federal court, is engaging in settlement talks.
Last week, amid the discussions, U.S. District Judge Lewis Kaplan ordered that document and evidence production in federal lawsuits pending before him against BNY Mellon be put on hold until March 17.
The Justice Department’s lawsuit, filed in 2011, accuses BNY Mellon of a scheme from at least 2000 to defraud custodial customers who used its FX services.