BNY Asks to Toss U.S. Fraud Case Over Currency Trading
By David McLaughlin – Mar 28, 2012 9:51 AM ET
Bank of New York Mellon Corp., the world’s largest custody bank, contested claims by the U.S. that it defrauded clients in foreign-exchange transactions and asked a court to dismiss the government’s lawsuit.
BNY Mellon said disclosures that it made to clients about the trading negate the claim that the bank engaged in a “scheme to defraud,” according to a court filing yesterday in federal court in Manhattan.
“The purported scheme to defraud is implausible,” BNY Mellon said. “A party that knows exactly what it is getting, and at what price, cannot have been defrauded.”
The U.S. Attorney in Manhattan said in an amended complaint that BNY Mellon defrauded clients, including public pension funds, of more than $1.5 billion through foreign-currency trades. The bank is also facing claims by several states over the same issue.
Ellen Davis, a spokeswoman for the U.S. Attorney’s Office, declined to comment on BNY Mellon’s filing.
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