Bank of New York Mellon Corp. has agreed to pay US$714 million to settle allegations it overcharged pension funds and other clients for foreign exchange services, Reuters reported.
US federal and New York state authorities, among others, had accused BNY Mellon of telling clients it would provide the best possible execution for their currency transactions, but instead gave them prices at or near the worst interbank rates during the trading day.
Meantime, the authorities said, BNY Mellon obtained better spot prices for itself and profited on the spread.
As part of the agreements settling lawsuits filed by New York state and the US government, the bank accepted responsibility for the conduct, the authorities said.
The world’s No. 1 custody bank also agreed to terminate David Nichols, its head of products management, and other executives, Manhattan US Attorney Preet Bharara said.
“The bank repeatedly deceived its customers and is paying a heavy penalty for it,” Bharara said in a statement.
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