ALBANY, N.Y. (AP) - New York Attorney General Eric Schneiderman sued Bank of New York Mellon for $2 billion on Tuesday, claiming it earned that amount over 10 years by defrauding clients in foreign currency exchange transactions.
According to Schneiderman's office, BNY Mellon misrepresented rates it would give currency transactions, providing nearly the rates of the trading day instead of the best. The case began with a 2009 whistle-blower complaint followed by an investigation. Clients include public pension funds.
New York City jointed in the lawsuit. Deputy Comptroller Ricardo Morales said officials are confident pensioners and taxpayers will recoup money they are owed.
The bank said the lawsuit was "prosecutorial overreach" based on "a fundamental misunderstanding" of the role of custodian banks in the global foreign currency market. BNY Mellon said it is confident it will prevail in the suit, which was filed in state Supreme Court in Manhattan.
BNY Mellon spokesman Kevin Heine said the bank is confident it provides its institutional clients and their investment managers with "competitive and attractive" foreign-exchange pricing, the information they need to make informed trading decisions.