Bank of New York Mellon (BK) was accused by participants in three retirement plans of overcharging for foreign-exchange transactions on American depository receipts, said a federal class-action lawsuit.
The suit was filed Dec. 31 in U.S. District Court in New York on behalf of participants in the $18.3 billion Central States, Southeast and Southwest Areas Pension Plan, Rosemont, Ill.; $2.7 billion Verizon Savings and Security Plan for Mid-Atlantic Associates, Basking Ridge, N.J., and $931 million Owens Corning Merged Retirement Plan, Toledo, Ohio; according to court documents.
The lawsuit claims BNY Mellon priced FX transactions on ADRs held by the plans and “selected a price for their own benefit that was worse than what was available in the market. … This scheme increased defendants' profits at the expense of their ERISA clients,” the court documents said.
BNY Mellon has settled several lawsuits filed by pension funds concerning its standing instruction FX transactions. This lawsuit deals with issues not covered in those settlements, according to the documents.
BNY Mellon said in an e-mailed statement, “We believe the suit is without merit, and we will defend ourselves vigorously.”