Two US states sue BNY Mellon over forex trades

Bank of New York Mellon is in the crosshairs of two southern US states that are suing the Wall Street giant for allegedly overcharging them millions of dollars on foreign currency trades.Florida and Virginia separately filed lawsuits Thursday against the bank, which is the primary custodian of their public retirement funds.BNY Mellon "added hidden spreads, including mark-ups and mark-downs" when it purchased and sold large amounts of foreign currency for the Florida Retirement System Trust Fund, the Florida complaint said."It appears that the bank charges the funds the most expensive price of the trading day ... When the currencies are sold, the bank pays the funds the least expensive price of the trading day. The bank then keeps the difference," the Virginia attorney general's office said in an email to AFP.Bank of New York Mellon strongly denied the allegations. The lawsuits "are unwarranted and reflect a flawed understanding of foreign currency markets," it said. The bank vowed to fight the lawsuits in court and said it was "confident we will prevail." Bother states are seeking to recover treble damages and a civil penalties of $11,000 on each allegedly fraudulent action.Virginia gave an overall figure of $811.6 million in civil penalties it is seeking.