Bank of New York Mellon Corp., which administers Massachusetts pension-fund assets, has agreed to reimburse Pension Reserves Investment Management $15.6 million for alleged overcharges on foreign currency exchange transactions, PRIM's board announced.
According to a Dec. 23 statement, the settlement results from months of negotiations between PRIM and BNY Mellon following PRIM's announcement that it intended to sue BNY Mellon on the matter. The settlement also resolved a separate administrative proceeding that Massachusetts Secretary of State William Galvin brought against the bank.
"Protecting the public's money is one of my top priorities as Treasurer, which is why we initiated a thorough review of BNY Mellon foreign trading fees when we heard allegations of overcharges from other pension funds," said state Treasurer Steven Grossman, who chairs the PRIM Board. "It's imperative that pension beneficiaries and taxpayers are treated fairly and that banks do not profit disproportionately at their expense."
The agreement calls for BNY Mellon to reimburse PRIM $15.45 million through a 64% discount on custody services to settle alleged foreign currency transaction overcharges. In addition, BNY Mellon has agreed to reimburse PRIM $100,000 for related legal fees, the settlement said.
PRIM will remit $750,000 to the whistleblower who originally called attention to the alleged overcharges.
