Bank of New York Mellon will pay $335 million to clients claiming the bank defrauded them in foreign- exchange transactions for as long as a decade, after a judge granted final approval to a settlement reached in March.
U.S. District Judge Lewis Kaplan Thursday allowed the settlement to go forward, paving the way for 1,200 clients to receive payments from the bank within 30 days. BNY Mellon agreed to the settlement as part of a larger $714 million resolution with the U.S., New York state, regulators and clients. Kaplan's decision resolves investors' class-action claims against the bank.
BNY Mellon promised investors the best rates on foreign-exchange deals, then overcharged them and pocketed the difference, according to the lawsuit. New York Attorney General Eric Schneiderman claimed the bank made $2 billion over 10 years. BNY Mellon agreed to fire executives involved in the alleged fraud, as part of its settlement with the U.S. and New York.
The suits followed investigations by states into whistle-blower claims of fraud.
"This is great news for the class," Elizabeth Cabraser, a lawyer for the investors, told Kaplan after he approved the settlement.