Bank of New York Mellon won final approval of a $180 million settlement with investors who claimed they lost money amid allegations the bank had defrauded clients in foreign-exchange transactions for as long as a decade.
The settlement, which was approved on Tuesday by U.S. District Judge Lewis Kaplan, is part of a plan by BNY Mellon to get past the forex crisis. The deal resolves a case that could have brought investors a maximum recovery of $1 billion, plaintiffs’ lawyers said in court papers.
The accord was reached in May after mediation by a former federal judge. It follows the bank’s agreement in March to pay $714 million to settle similar allegations by the U.S., New York state and customers.
The investor class action was filed in 2011, the same year federal and state officials alleged in lawsuits that BNY Mellon misled customers by promising to pay the best available rates when executing foreign-exchange transactions. Instead, the bank took advantage of the best rates, gave customers less favorable terms and pocketed the difference, according to the complaints.