Ohio state Treasurer Josh Mandel sent a letter Tuesday to state Attorney General Mike DeWine requesting a full investigation into foreign currency exchange practices of the custodial banks for the state's employee pension funds and the Ohio Bureau of Workers' Compensation.
Mr. Mandel is “concerned that the banks may have manipulated foreign currency trade prices in order to maximize the banks' profit, at the expense of Ohio public servants, businesses and taxpayers,” according to the letter.
Mr. Mandel's request comes on the heels of an investigation by the SEC and legal actions aimed at State Street Corp. and Bank of New York Mellon, the two largest U.S. custodians. Attorneys general in more than 20 states are also investigating whether to sue over alleged overcharging by the banks when they traded U.S. dollars and other currencies.
Mr. Mandel wants to know “whether these practices occurred and over what time frame,” according to Seth Unger, press secretary for the treasurer's office.
Most recently, Massachusetts Treasurer Steven Grossman said Monday he will be meeting with his state's attorney general later this week to discuss how to proceed in recouping what he called “significant” losses suffered because of “excessive” forex trading fees levied by custodian Bank of New York Mellon.
State Street is the global custodian for the $76 billion Ohio Public Employees Retirement System, the $65.8 billion Ohio State Teachers' Retirement System and the $12 billion Ohio Police & Fire Pension Fund, confirmed fund representatives and Mr. Unger. BNY Mellon Asset Servicing is the global custodian for the $10.2 billion Ohio School Employees Retirement System, according to Mr. Unger.
It could not be learned by deadline if the Bureau of Workers' Compensation has a global custodian.
All the funds are based in Columbus.