BNY Mellon Accused of Ripping Off Virginia Pension Fund
The Wall Street Journal reported that the Bank of New York Mellon created fake trades and overcharged Virginia pension funds over $20 million. These findings and allegations were recently revealed after documents were unsealed in a Virginia court. Traders reportedly used a foreign exchange system called “Charlie” to perpetrate the fraud. According to the article, currency trading is a high profit area for big banks.
BNY Mellon allegedly profited by carrying out a trade for the pension fund giving them the worst rate of the day, while pocketing the difference between that rate and the rate the bank actually received. Court documents allege that the currency traders at BNY Mellon would sometimes wait for hours before cherry picking prices beneficial to them that they would charge the Virginia state pension fund, which would be routed through a bank foreign exchange system called “Charlie.” When the fund received a monthly statement, it would contain only the falsified rate, since those reports do not contain time stamps for trades.
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