If you needed any more proof that not only retail forex brokers mess with forex prices you now have another suit against a major bank for just the same. Reuters reports that Bank of New York Mellon was sued by a Pennsylvania transit authority this week in the latest legal skirmish over foreign exchange trading.
BNY Mellon and State Street Corp have been accused of overcharging pension systems for transactions such as swapping dollars for euros or yen to buy and sell international securities. Attorneys general in three states have now stepped in to lead whistleblower cases. Class actions by other pension funds have also hit the courts. The banks reject accusations of wrongdoing. A proposed class action against BNY Mellon, filed in a Philadelphia federal court on Monday, incorporates allegations made in whistleblower lawsuits in Florida and Virginia and claims BNY Mellon charged “false” forex rates.
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If you remember State Street was involved in quite a few suits lately – Back in 2009 the California attorney general’s office has charged the State Street Corporation (company that owns Currenex) with fraud, accusing the company of cheating the state’s two largest pension funds of at least $56.6 million by overcharging them for a series of foreign exchange trades. Now also the Arkansas Teacher Retirement System sued State Street Corp. over claims that the Boston-based bank engaged in unfair and deceptive practices regarding foreign exchange transactions.
WSJ also recently reported about quite a few upcoming suits against bank for messing with forex rates and I guess the class action suit against BNY Mellon is just the first of them.