Bank of New York Mellon Being Sued for Fraud on Exchange Rates

[JCMach1]

Thanks to Max Keiser for reporting on this http://www.youtube.com/watch?v=behbKi7ef8I

Here are more details from the NY Times Blogs...

The Justice Department and the New York attorney general, Eric T. Schneiderman, filed separate civil charges last week against Bank of New York Mellon, accusing it of defrauding customers of its foreign exchange services. The cases raise sticky questions about when marketing claims cross the imperceptible line from puffery to fraud.

The bank used phrases like “best execution” and “most competitive rates” in promoting its services, while the complaints assert it overcharged a number of pension funds and governments by secretly taking advantage of spreads in the prices for foreign currencies to reap profits...

Unlike a privately negotiated trade that would be much more cumbersome, the standing instruction service is an easy way for customers to have foreign exchange transactions completed because Bank of New York Mellon simply puts through the trade without needing any further authorization from the customer.

The Justice Department’s complaint contends that the bank “consistently gives standing instruction clients virtually the worst rates of the day,” and the New York attorney general argues that it “flagrantly misrepresented” its practices by stating that it was using the “best rate of the day.” The federal suit asserts that Bank of New York Mellon violated the mail and wire fraud statutes, while the New York action alleges breaches of the Martin Act, the state’s broad securities fraud statute... http://dealbook.nytimes.com/2011/10/10/the-difference-between-puffery-and-fraud/


The running assumption IS... Of course, they will get away with it! And of course, the NYT is defending them in this piece!

[rdking647]

1. why is it always civil charges

charge them with criminal violations.. it will put the bank out of business and serve as a warning to other banks the the shit they have been doing wont be tolerated any more

[JCMach1]

2. Also good to note... IT'S PENSION FUNDS!!! Chances are there are DUers here today that have had

money stolen by this bank because they are almost the sole market maker.