Bank of New York Mellon is once again in the crosshairs of a proposed class action by retirement investors who say the company’s foreign currency transactions cheated them out of money.
The latest lawsuit, filed Dec. 29 by a union worker covered by the Sheet Metal Workers’ National Pension Fund, accuses the company of wrongly manipulating the rates used to convert retirement plan assets held in foreign currencies into U.S. dollars. This manipulation allowed BNY Mellon to skim extra fees from each transaction at the expense of retirement plan investors, the worker says.
The case largely mirrors lawsuits brought in 2015 and 2016, which attacked BNY Mellon’s foreign currency transactions as a violation of fiduciary duties owed to retirement plan investors under the Employee Retirement Income Security Act. BNY Mellon has spent years defending lawsuits and investigations concerning its foreign exchange transactions. Critics say BNY Mellon set fictitious rates when converting foreign securities into U.S. dollars, allowing the company to secretly profit off the spread between the fictitious rate and the actual rate.
These earlier ERISA cases got a boost last March, when a federal judge in New York rejected BNY Mellon’s attempt to have the cases dismissed. Those cases, like the one filed Dec. 29, allegedly involve the retirement benefits of hundreds of thousands of workers.
Both the 2016 case and this newest lawsuit were filed by law firm Keller Rohrback on behalf of participants in the sheet metal pension plan. On Nov. 29, 2017, Keller announced that the worker who filed the 2016 case had died, a development likely to end Keller’s involvement in that case.
BNY Mellon is a global financial services company with $32 trillion in assets under custody and administration and nearly $2 trillion in assets under management, according to data on the Bloomberg Terminal. The company declined to comment on the new lawsuit, which is pending in the U.S. District Court for the Southern District of New York.
JPMorgan is also defending ERISA claims over its foreign currency transactions.
The newest case is Scheibel v. Bank of N.Y. Mellon, S.D.N.Y., No. 1:17-cv-10231, complaint 12/29/17.