The Abu Dhabi Investment Authority, the Kuwait Investment Authority, and the Alaska Permanent Fund are among the hundreds of sovereign wealth funds, pensions, asset managers, and other financial institutions worldwide that have been cited as possibly losing millions of dollars in foreign exchange services provided by BNY Mellon, an amended complaint by the US Justice Department has claimed.
The Justice Department had sued BNY Mellon in October in federal court in New York, when claiming that the bank defrauded federally insured banks in handling foreign exchange. The amended lawsuit, filed June 6, alleges that the custodial bank generated more than $1.5 billion from its top 200 standing-instruction clients from 2007 to 2010 by charging their customers at the worst -- or nearly worst -- price point of the day.
The revenues had been allegedly earned for the price BNY Mellon assigned to clients and the more favorable rates the bank obtained trading for itself, a spokesperson at the US Department of Justice told aiCIO.
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