Florida Attorney General Pamela Jo Bondi on Thursday sought to take over a lawsuit alleging Bank of New York Mellon overcharged the Florida State Board of Administration, Tallahassee, for foreign exchange fees.
Ms. Bondi, one of the three trustees of the board, which oversees $154.7 billion, filed a notice of intervention and motion to unseal the case file in Leon County Circuit Court in Tallahassee.
The suit was initially filed by FX Analytics on Nov. 9, 2009, on behalf of the state of Florida, and seeks triple the losses and other penalties.
In the notice, the attorney general seeks to take over the suit from FX. She plans to file a complaint against BNY Mellon in the “near future,” according to the motion, although no time frame for that filing was provided.
The attorney general's office after completing its review of the case's “written materials supplied by (FX) as well as other materials and information … has concluded that the state should take over and proceed with this action,” the motion states.
BNY Mellon is the global master custodian for all the funds the board oversees. The board plans to begin a search March 1 for a custodian.
BNY Mellon's contract for the $126.3 billion Florida Retirement System's defined benefit plan, for which it also serves as the primary securities lending agent, expires in 2012, while its contract for the FRS' $5.9 billion 401(a) plan expires at the end of 2011.
“We have been working with the attorney general's office for several months,” on this issue, said Dennis D. MacKee, FSBA communications director. Because of the potential litigation, he declined to comment further.
Jennifer Krell Davis, deputy communications director and press secretary for the Florida attorney general's office, provided a copy of the motion but no comment.
In a statement, BNY Mellon said: “The allegations are without merit. We provide a broad range of valuable services including foreign exchange to large, sophisticated money managers representing pension funds and other institutional clients. The money managers transact with us at competitive FX prices and we provide reliable, low-risk service and execution. We will defend ourselves vigorously.”
