BNY Mellon Directors Sued by Shareholder Over Foreign Exchange Allegations
By David McLaughlin – Oct 26, 2011 12:01 AM ET
Bank of New York Mellon Corp.’s chief executive officer and directors were sued by a shareholder after government officials alleged the bank defrauded clients through foreign-exchange transactions.
The bank’s pricing practices for currency trades, as described in lawsuits by state and federal officials, have damaged its reputation and have caused or will cause it to lose business, the shareholder, Murray Zucker, said in a complaint filed yesterday in New York State Supreme Court.
Chief Executive Officer Gerald Hassell and the directors “risked sacrificing a significant long-term revenue stream and hard earned reputation for short-term price gouging of institutional clients,” Zucker said. He is suing on behalf of the bank for damages caused by the directors’ actions.
BNY Mellon was sued by the U.S. and the New York attorney general’s office this month over foreign exchange trades made on behalf of clients. The New York-based bank earned $2 billion through a 10-year fraud, according to Attorney General Eric Schneiderman. Florida and Virginia have also sued the bank.
Kevin Heine, a bank spokesman, had no immediate comment on the lawsuit. The bank previously has denied that it defrauded clients and said it will fight the lawsuits by New York and the U.S. government.
The case is Zucker v. Hassell, 11112133, New York State Supreme Court (Manhattan).
To contact the editor responsible for this story: Michael Hytha at email@example.com