Mass. Targets BNY Mellon Over Alleged Forex Scam

Law360, New York (October 26, 2011, 6:57 PM EDT) -- Massachusetts Secretary of the Commonwealth William F. Galvin issued an administrative complaint against The Bank of New York Mellon Corp. on Wednesday, saying the bank overcharged state pension funds for foreign currency exchange transactions.

BNY Mellon created its Standing Instruction Service to execute foreign exchange transactions for its custodial clients. The bank told customers the service was free and cost-effective, when it actually applied hidden markups that were effectively a fee for the bank, according to the complaint.

The service “was a hidden scheme that rigged...
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