DOL Reaches $84 Million Settlement with BNY Mellon
The banked is guilty of deceiving retirement plans about foreign currency exchange rates.
The Bank of New York Mellon will repay $84 million to employee benefit plan customers who were victimized through the bank's "standing instruction" foreign exchange trading program, according to the DOL. The agreement was reached as part of a larger settlement that resolves private lawsuits against the bank.
"This case is a reminder that financial institutions charged with safeguarding retirement plan assets, sometimes put the institution's interests ahead of those of the investors they represent," said Secretary of Labor Thomas E. Perez. "Today's settlement offers more proof that when they do so, we at the department along with our colleagues at federal and state agencies will hold them accountable."
According to the agency's news release, the bank assigned nearly the worst prices at which currencies had traded in the market during all or part of a day. While this was happening, the bank was leading its clients to believe it was pricing their transactions in at a better price.
The department determined that the bank's failure to work prudently and solely in the interest of the plans, its dealings with plan assets to benefit itself, and its misrepresentations and failures to disclose its activities were all breaches of the bank's fiduciary duties to the plans and violated the Employee Retirement Income Security Act.