BRADENTON, Fla. — Florida Attorney General Pam Bondi negotiated a $28 million settlement with Bank of New York Mellon over foreign currency transaction charges and securities lending.
The settlement, announced Nov. 1, resolves allegations concerning overcharges on the currency transactions and issues related to a soured investment.
Both issues involved BNY Mellon as custodian bank for the $132 billion Florida Retirement System Trust Fund, which is overseen by the State Board of Administration.
Originally a whistleblower alleged the bank improperly reported the state's foreign currency transactions and kept the difference between an inflated price and the actual execution price.
Bondi, who intervened in the whistleblower case, said the settlement provides full compensation for past foreign currency trades. It also resolves allegations involving investments for the retirement system by the bank in medium-term notes issued by Sigma Finance Inc. Sigma defaulted on certain notes in late September 2008 and subsequently went into receivership.
"We are gratified that the Florida Attorney General is withdrawing her lawsuit and that we've resolved issues related to the State Board of Administration's securities lending program," BNY Mellon spokesman Kevin Heine said. "We're also pleased to reach an agreement with the State Board of Administration that allows us to continue our long-standing relationship."
The SBA state renewed its contract with BNY Mellon as custodian of the retirement trust fund last month.
