AP1, Stockholm, filed a lawsuit Monday in London commercial court against Bank of New York Mellon seeking $35.5 million in damages for negligence as global custodian of the 202.6 billion Swedish kronor ($30.6 billion) fund.
AP1 said in a news release that BNY Mellon breached the fund’s investment guidelines regarding investing collateral as part of the fund’s securities lending program in 2008. BNY Mellon invested the $35.5 million in Sigma Finance, a structured investment vehicle, which filed for bankruptcy protection in 2008, according to AP1.
“We have been trying to come to an agreement with (BNY Mellon) for some time, unfortunately without success,” Johan Magnusson, managing director of the fund, said in the release.
AP1 began a search in May for a global custodian; fund spokesman Ossian Ekdahl said a selection has not yet been made. The fund’s securities lending program is currently suspended but will resume in the future, Mr. Ekdahl said.
BNY Mellon spokesman Tim Steele said BNY Mellon has “not yet had an opportunity to review the complaint, so we can’t comment on the matter at this time.”