The Commonwealth of Virginia has dismissed a case accusing BNY Mellon of hiding mark-ups on FX transactions to the Virginia Retirement System (VRS).
The complaint was filed on July 10 2012 on the information brought about by a whistleblower.
A statement from Attorney General of Virginia said: The litigation is over and BNY Mellon and the funds have extended their respective business relationships for 10 years. The case has been resolved by agreement of the parties, which allowed for the reworking and extension of the funds’ contracts with the bank. This resolution has conferred significant financial benefits for Virginia employees and retirees.
As legal counsel for the Virginia Retirement System, this office is not a party to the reworked custody agreements and therefore, will not be commenting on their specific details. The VRS and the other funds that have renewed their agreements with BNY Mellon have informed us that the terms of the 10-year renewal are favorable to their members.
“The board of the VRS, believing it was in the best interest of their beneficiaries, urged this resolution.”
As part of the settlement, the State made a $1.1 million payment to whistleblower Grant Wilson. The former trader with BNY Mellon collected information on how the the bank’s alleged scheme, which aided investigations by the government and a plaintiff legal group, FX Analytics, into the practices.
The end of the litigation allowed BNY Mellon to renew its custody banking services to the VRS. The contract extends the current relationship between BNY Mellon and VRS for five years with an option to renew for another five-year period.
BNY Mellon will continue to provide VRS with custody, performance and risk, securities lending and foreign exchange services.
(JDC)