Legal proceedings brought about by an investor in 2009 caused a sharp decrease in profits at Dublin-based BNY Mellon Investment Servicing (International), formerly known as PNC Global Investment Servicing, last year. Directors reports and accounts filled with Ireland’s Companies Registration Office (CRO) for the year ending Dec. 31 2010 show profit before tax for 2010 was $1.47 million, down nearly 80% on the $6.6 million reported in 2009.
The proceedings and their impact were recently reported by the Irish Times newspaper. They relate to losses incurred by investors due to an alleged delay in processing two redemption requests. BNY Mellon settled the proceedings in January, but did not admit liability, said the CRO report. Accounts filed show $5 million had been set aside against the outcome of the action. This exceptional charge accounted for most of the fall in profits.
The report adds that a liquidator to a BNY Mellon Investment Servicing-administered fund gave notice he intends to take an action for damages against it. The company has not made provisions for this as yet unstated claim for the action. It said it would defend any claim on the basis that the company has complied with the terms of the service agreement.
BNY Mellon bought PNC Global Investment Servicing for $2.31 billion in a cash deal last February.
(JDC)