Bank of New York Mellon Will Settle Currency Trade Case for $714 Million
The authorities accused the bank of assuring clients that they would receive the best possible rate when executing a currency trade. In reality, the authorities said, the bank did just the opposite: It provided clients “prices that were at or near the worst interbank rates,” enabling the bank to make extra cash during the 2008 financial crisis.
.. The victims included New York City pension funds and prominent private investors, the authorities said. City investors included teachers and police officers, while the private investment funds belonged to the likes of Duke University and the Walt Disney Company.
.. Still, the $714 million settlement amounts to a fraction of the roughly $2 billion in suspected ill-gotten gains that Mr. Schneiderman’s office initially sought as a penalty.
.. Under the terms of the Bank of New York Mellon settlement, the bank must “end the employment of certain executives involved in the fraud,” including David Nichols, a managing director at the bank whom Mr. Bharara’s office sued in 2012.
.. The settlement requires the bank to “effectuate the separation” of Mr. Nichols, but it does not say when he must leave the bank nor does it require him to pay any financial penalty to the government.