Settlement of the Bank of New York Mellon Corp. Forex Class Action
Written by Welcome on May 28, 2015
Recently, a substantial settlement was reached in a high-profile securities class action lawsuit. This lawsuit pertained to the Bank of New York Melon Corp. and its Standing Instruction FX Program. This program involved the trading of foreign currencies.
The lawsuit that was brought against the Bank of New York Mellon Corp. alleged that the institution, and those acting on its behalf, engaged in trading behavior that netted profits at the expense of the institution’s clients. Specifically, the lawsuit alleged that the Bank of New York Mellon Corp. traded foreign currency near the low end or high end of exchange rates, whichever was most beneficial to itself. As a result it caused financial harm to its clients.
The New York Attorney General, who represented a number of different parties affected by the Bank of New York Mellon Corp.’s actions, brought the class action. Most notably, there are a number of New York State pensioners whose portfolios were adversely affected by the financial institutions actions. In addition, other corporations were affected, such as the Walt Disney Company and Duke University, according to the New York Times.
These actions on the part of the Bank of New York Mellon Corp., the New York Attorney General alleged, were designed to net profits during the financial crisis that began in 2008.
In settling the class action, Bank of New York Mellon Corp. has agreed to pay a significant amount. This settlement is for $335 million, which is in addition to other damages the institution will be paying out. These damages include $115 million as the result of a settlement reached with the New York State Attorney General.
It is worth noting, though, that this settlement pales in comparison to what was originally sought. In originally pursuing litigation, the New York Attorney General sought to recover in excess of $2 billion from Bank of New York Mellon Corp. For this reason, the institution vigorously fought the charges that were made against it.
Ultimately, however, the Bank of New York Mellon Corp. decided to settle the case. In part, the institution sought to move past the case, which is one of many holdovers from the financial crisis of several years ago. In addition, the settlement also provides certain protections for the institution. Most notably, it brings to an end any claims that could be made regarding the process, and it only requires the institution to admit to a level of guilt much lower than what was originally alleged by the New York Attorney General.
Who Is Eligible to Submit a Claim?
The class in this lawsuit is limited to a certain timeframe. Those submitting a claim must have been customers of Bank of New York Melon Corp. between January 12, 1999 and January 17, 2012. In addition, these customers must have made use of the Standing Instruction FX Program provided by the institution. There are, of course, other affected parties. However, many will not need to make a direct claim, as the settlement will apply to the institutions with which those individuals conduct business.
If you are a part of the settlement class, then you can make a claim through the settlement website located here. The settlement that has been reached is subject to a final hearing, which will be conducted in late September of this year. Those who wish to exclude themselves from the settlement class have until August 17 to do so, and those who wish to file an objection to the settlement that has been reached have until August 26 to do so.