The Southeastern Pennsylvania Transportation Authority sued Bank of New York Mellon, seeking to recover what it called “unlawfully obtained” proceeds from foreign-exchange transactions.
BNY Mellon manipulated FX transactions to maximize its profits at the expense of clients such as SEPTA, lawyers for the authority said in a complaint made public Wednesday in U.S. District Court in Philadelphia.
The lawsuit follows two whistle-blower cases filed against BNY Mellon in Florida and Virginia. The bank’s practices remained unknown until the complaints in those cases were unsealed, lawyers for SEPTA said.
“The account statements provided to BNY Mellon’s clients failed to provide pertinent details including time stamps for each FX transaction,” SEPTA said in its complaint. “Without FX time stamps, clients were unable to verify that the FX rates charged by BNY Mellon were consistent with the actual FX rates and the time.”
Florida last month became the fourth U.S. state to dispute the pricing of foreign currency transactions when it joined the whistle-blower suit filed against BNY Mellon in Tallahassee by FX Analytics, claiming it overcharged the $154.7 billion Florida State Board of Administration, Tallahassee. In January, Virginia joined another FX Analytics lawsuit, originally filed in 2009, and is seeking $150 million in damages over claims BNY Mellon defrauded the $54 billion Virginia Retirement System, Richmond.
“Any claim that BNY Mellon engaged in so-called fake trades at false prices is categorically untrue, and we will vigorously defend against these false allegations,” Kevin Heine, a spokesman for the bank, said in a telephone interview.
SEPTA is seeking to represent all similarly affected clients of BNY Mellon excluding government pension funds that are covered by independent whistle-blower actions that have been unsealed or will be unsealed, according to the complaint.
