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BNY Mellon (BK) Settles FX-Pricing Case with SEC for $30M
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Issues pertaining to foreign exchange (“FX”) trades still seem to hang over The Bank of New York Mellon Corporation (BK - Free Report) with the company agreeing to shell out $30 million in fines to the Securities and Exchange Commission (“SEC”). The penalty is to settle the civil charges over the bank’s alleged mispricing of FX transactions.
According to a regulatory filing, SEC found that BNY Mellon misled a certain number of its custodial clients from 2000 to at least 2011 with regard to cost of FX trading services. The bank was accused of deceiving customers by overcharging them for such transactions.
The complaint charged BNY Mellon of fraudulent representation wherein the bank did not provide the best possible prices to its customers, instead offering less favorable terms to clients and putting its own interests ahead of them.
Last year, BNY Mellon settled similar charges made by the U.S. Department of Justice, the New York Attorney General, the U.S. Department of Labor, the SEC and private customer class actions for $714 million.
The current settlement will not have any financial impact on BNY Mellon as it will be covered by legal reserves already set aside by the bank. Also, the company will be relieved from its litigation overhangs to some extent with the latest settlement, which will help it focus more on its core operations and improve efficiency.
“We are pleased to put these legacy FX matters behind us, which was in the best interest of our company and our constituents,” said Colleen Krieger, a BNY Mellon spokeswoman, in an e-mailed statement.
Companies like State Street Corp. (STT - Free Report) and JPMorgan Chase & Co. (JPM - Free Report) have also been under regulatory scrutiny for overcharging clients either in FX transactions or pension funds.
Currently, BNY Mellon carries a Zacks Rank #3 (Hold). A better-ranked bank is Bank of Marin Bancorp (BMRC - Free Report) , which holds a Zacks Rank #2 (Buy).
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BNY Mellon (BK) Settles FX-Pricing Case with SEC for $30M
Issues pertaining to foreign exchange (“FX”) trades still seem to hang over The Bank of New York Mellon Corporation (BK - Free Report) with the company agreeing to shell out $30 million in fines to the Securities and Exchange Commission (“SEC”). The penalty is to settle the civil charges over the bank’s alleged mispricing of FX transactions.
According to a regulatory filing, SEC found that BNY Mellon misled a certain number of its custodial clients from 2000 to at least 2011 with regard to cost of FX trading services. The bank was accused of deceiving customers by overcharging them for such transactions.
The complaint charged BNY Mellon of fraudulent representation wherein the bank did not provide the best possible prices to its customers, instead offering less favorable terms to clients and putting its own interests ahead of them.
Last year, BNY Mellon settled similar charges made by the U.S. Department of Justice, the New York Attorney General, the U.S. Department of Labor, the SEC and private customer class actions for $714 million.
The current settlement will not have any financial impact on BNY Mellon as it will be covered by legal reserves already set aside by the bank. Also, the company will be relieved from its litigation overhangs to some extent with the latest settlement, which will help it focus more on its core operations and improve efficiency.
“We are pleased to put these legacy FX matters behind us, which was in the best interest of our company and our constituents,” said Colleen Krieger, a BNY Mellon spokeswoman, in an e-mailed statement.
Companies like State Street Corp. (STT - Free Report) and JPMorgan Chase & Co. (JPM - Free Report) have also been under regulatory scrutiny for overcharging clients either in FX transactions or pension funds.
Currently, BNY Mellon carries a Zacks Rank #3 (Hold). A better-ranked bank is Bank of Marin Bancorp (BMRC - Free Report) , which holds a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>