Bank of New York to Pay $180 Million to Settle Forex Suit

By Lauren Pollock 

Bank of New York Mellon Corp. said Thursday that it agreed to pay $180 million to settle a foreign exchange-related class-action lawsuit, resolving almost all of its currently pending forex-related actions.

The settlement comes two months after the trust bank reached a $714 million settlement to resolve allegations it defrauded pension funds and other clients by overcharging them on currency transactions.

The bank said it would take a pretax charge of $50 million in the second quarter related to the latest settlement, which resolves a suit that alleged securities law violations. Other details about the suit weren't immediately available.

Bank of New York said the deal would resolve virtually all its currently pending foreign exchange-related actions, with the exception of several lawsuits brought by individual customers. It is subject to court approval.

The larger March settlements resolved long-running lawsuits from Manhattan U.S. Attorney Preet Bharara and New York Attorney General Eric Schneiderman that accused the custody bank of giving some clients worse prices on foreign currency trades than they had been promised.

Bank of New York, which had refuted the lawsuits' allegations since they were first filed in 2011, admitted as part of the agreements that it told certain clients its focus was on "securing the best possible rates" even though the prices it actually gave those clients were close to the worst of the day, according to settlement documents.

The bank also agreed to fire certain employees involved in the conduct.

The lawsuits and investigations are separate from a broader Justice Department probe into allegations that traders at top global banks worked to manipulate foreign exchange rates to benefit their banks' trading positions. The Justice Department announced a settlement in that case Wednesday, ordering five global banks to pay a combined $5.6 billion.

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