BNY Mellon Whistleblower Provides Information Aiding Several States’ Lawsuits

Last month, Louisiana Municipal Police Employees’ Retirement System (“LAMPERS”) filed a securities class action lawsuit in the U.S. District Court for the Southern District of New York against The Bank of New York Mellon Corporation (BNY Mellon) under the Securities Exchange Act of 1934. The lawsuit filed by LAMPERS, discussed in an article published by Reuters, arose from the actions of whistleblower Grant Wilson, a former employee of BNY Mellon, who exposed widespread overcharging of pension funds by the bank.

Wilson worked for BNY Mellon for 19 years as a foreign-exchange trader and left the company this past spring.  During the last few years of his employment with BNY Mellon, Wilson began to gather evidence that the bank was improperly charging state and local pension funds for foreign currency exchanges.  The information that Wilson disclosed provided the basis for lawsuits filed against BNY Mellon by five states, including Florida, New York, and Virginia.

According to the LAMPERS complaint, “While BNY Mellon’s FX trading services were offered to clients as [being] ‘free of charge,’ in truth, BNY Mellon rigged the pricing of its FX transactions in order to reap illicit profits.”  The complaint also alleges that “the Company’s deceptive practice began to surface in January 2011 after two whistleblower (or qui tam) lawsuits against BNY Mellon were unsealed in Virginia and Florida,” leading to other lawsuits, including the recent suit filed by LAMPERS.

Tagged: Enforcement Bodies, Securities and Exchange Commission (SEC)