BOSTON/SAN FRANCISCO, Feb 16 (Reuters Legal) - Recently unsealed lawsuits against Bank of New York Mellon contend it overcharges customers about $500 million a year for foreign currency trades, showing the high stakes facing banks in ongoing probes.
The figure is disclosed in lawsuits filed on behalf of pension funds in Florida and Virginia. It follows claims of an annual $400 million national fraud contained in a lawsuit against State Street Corp in California.
Broadly, the suits allege the banks improperly charged unfairly high prices for forex transactions, inflating their own profits.
Both banks have denied wrongdoing and vowed to defend themselves. Said a BNY Mellon spokesman: "The unsubstantiated claim that BNY Mellon engaged in 'fake' trades at 'false' prices is categorically untrue, and we will vigorously defend against these false allegations."
At the least, the $500 million figure suggests there is more room for other lawsuits to be brought by state retirement systems or investors who believe they paid custodial banks too much for foreign exchange transactions.
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