Salvation Army Sues BNY Mellon For $22M Over Loans

Law360, New York (April 4, 2011, 5:13 PM EDT) -- The Salvation Army's Southern division on Friday sued its custodian bank, the Bank of New York Mellon Corp., for $22 million in damages over the bank's ostensibly conservative securities lending program.

BNY Mellon plied the Salvation Army's securities portfolio into risky, illiquid securities, including subprime mortgage-backed securities and investments in now-bankrupt Lehman Brothers Holdings Inc.'s corporate debt, that collapsed in the financial crisis while it told the nonprofit that the investments were low-risk, according to a complaint Andrew J. Melnick of Schindler Cohen & Hochman LLP...
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