October 4, 2011 / 9:55 PM / 7 years ago

NY sues BNY Mellon over forex claims

(Reuters) - New York’s attorney general said on Tuesday he filed a lawsuit against Bank of New York Mellon (BK.N) for defrauding clients in foreign currency exchange transactions.

A BNY Mellon sign is seen on their headquarters in New York's financial district, January 19, 2011. REUTERS/Brendan McDermid

New York Attorney General Eric Schneiderman said BNY Mellon misrepresented to customers the rates for foreign currency transactions over a 10-year period. Schneiderman said he is seeking a nationwide recovery of nearly $2 billion.

New York is the latest state to bring claims against BNY Mellon, which has been battling allegations of FX overcharging for months. Virginia and Florida filed lawsuits against the company in August.

A BNY Mellon spokesman said in a statement that the lawsuit was based on a “fundamental misunderstanding” of the foreign exchange market and the role of custodian banks.

“Simply put, this is the kind of prosecutorial overreach that ill serves New York, New Yorkers and the pension funds that the Office of New York Attorney General purports to represent,” said the spokesman.

The New York Attorney General said the suit, which was brought with the city of New York, adds new claims to an existing whistleblower action that was filed by FX Analytics in 2009.

Reporting by Andrew Longstreth; additional reporting by Dan Levine in San Francisco; Editing by Bernard Orr

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