A lawsuit filed against Bank of New York Mellon Corp. over charges related to foreign-exchange trades made on behalf of pension funds, including the $54 billion Virginia Retirement Systems, was dismissed in state circuit court in Fairfax on Tuesday.
Virginia Circuit Court Judge R. Terrence Ney dismissed the complaint against the bank, saying the state couldn't proceed under the Virginia Fraud Against Taxpayers Act.
“We are pleased that the Virginia court dismissed the entire case against us, vindicating our position that the claims were without merit,” Kevin Heine, a spokesman for the New York- based bank, said in a statement.
“We are disappointed that, after twice rejecting the argument advanced by the bank, the court has reversed itself and adopted that argument today,” said Brian Gottstein, a spokesman for Virginia Attorney General Kenneth Cuccinelli.
In November, Mr. Ney rejected the bank's argument for dismissing the case that accused it of defrauding the Richmond-based state pension fund and pension funds in Fairfax and Arlington counties.
Mr. Cuccinelli sued BNY Mellon in August 2011, claiming the bank violated state law by charging “undisclosed markups” on currency-exchange trades. Virginia was seeking more than $800 million in damages.
“It is important to remember that the court's ruling does not absolve the bank of wrongdoing,” Mr. Gottstein said in an e-mail. “The court assumes fraudulent behavior by the bank, but finds that the Virginia statutes are written in such a way as to prevent that fraud from being punished under the Fraud Against Taxpayers Act.”
Bloomberg contributed to this story.