JPMorgan, Bank of NY Mellon win dismissal of forex lawsuits

Wed Jul 3, 2013 3:51pm EDT
 
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By Jonathan Stempel

NEW YORK (Reuters) - JPMorgan Chase & Co (JPM.N: Quote) and officials at Bank of New York Mellon Corp (BK.N: Quote) on Wednesday won the dismissal of lawsuits accusing them of overcharging clients for trading currencies.

U.S. District Judge Denise Cote in Manhattan threw out a lawsuit that accused the largest U.S. bank by assets of breaching a fiduciary duty to custodial clients by charging "hidden and excessive mark-ups" on currency trades.

Hours earlier, Cote's colleague, Lewis Kaplan, made public his dismissal of a lawsuit by Bank of New York Mellon shareholders accusing bank officials of ignoring "red flags" or knowing that trades were being processed at the worst or near-worst prices of the day. Chief Executive Gerald Hassell was among the defendants in that case.

The JPMorgan lawsuit was led by the Louisiana Municipal Police Employees' Retirement System, and sought class-action status on behalf of pension fund custodial clients.

Meanwhile, the Bank of New York Mellon lawsuit was led by the Iron Workers Mid-South Pension Fund and by California resident Marilyn Clark, and sought to force executives and directors to reimburse the bank for damages.

Lawyers for the plaintiffs in both cases did not immediately respond to requests for comment.

The lawsuits are among several in the last few years where federal and state regulators, customers and shareholders have accused custodial banks of defrauding clients of millions of dollars through overcharges on foreign exchange trades.

Custodial banks provide back-office and other services including accounting, asset valuations, currency trading, portfolio servicing and stock lending. Bank of New York Mellon is the world's largest custodial bank, while JPMorgan is the third-largest.   Continued...

 
The entrance to JPMorgan Chase's international headquarters on Park Avenue is seen in New York October 2, 2012. REUTERS/Shannon Stapleton