Result: $504 million in settlements including $335 million in customer class
In re Bank of New York Mellon Corp. Foreign Exchange Transactions Fraud Litigation
Lieff Cabraser served as co-lead class counsel for a proposed nationwide class of institutional custodial customers of The Bank of New York Mellon Corporation (“BNY Mellon”). The litigation stemmed from alleged deceptive overcharges imposed by BNY Mellon on foreign currency exchanges (FX) that were done in connection with custodial customers’ purchases or sales of foreign securities. Plaintiffs alleged that for more than a decade, BNY Mellon consistently charged its custodial customers hidden and excessive mark-ups on exchange rates for FX trades done pursuant to “standing instructions,” using “range of the day” pricing, rather than the rates readily available when the trades were actually executed.
In addition to serving as co-lead counsel for a nationwide class of affected custodial customers, which included public pension funds, ERISA funds, and other public and private institutions, Lieff Cabraser was one of three firms on Plaintiffs’ Executive Committee tasked with managing all activities on the plaintiffs’ side in the multidistrict consolidated litigation. Prior to the cases being transferred and consolidated in the Southern District of New York, Lieff Cabraser defeated, in its entirety, BNY Mellon’s motion to dismiss claims brought on behalf of ERISA and other funds under California’s and New York’s consumer protection laws.
The firm’s clients and class representatives in the consolidated litigation included the Ohio Police & Fire Pension Fund, the School Employees Retirement System of Ohio, and the International Union of Operating Engineers, Stationary Engineers Local 39 Pension Trust Fund.
In March 2015, a global resolution of the private and governmental enforcement actions against BNY Mellon was announced, in which $504 million will be paid back to BNY Mellon customers ($335 million of which is directly attributable to the class litigation).
On September 24, 2015, U.S. District Court Judge Lewis A. Kaplan granted final approval to the settlement. Commenting on the work of plaintiffs’ counsel, Judge Kaplan stated,
This really was an extraordinary case in which plaintiff’s counsel performed, at no small risk, an extraordinary service, and they ought to be compensated for it. They did a wonderful job in this case, and I’ve seen a lot of wonderful lawyers over the years. This was a great performance. They were fought tooth and nail at every step of the road. It undoubtedly vastly expanded the costs of the case, but it’s an adversary system, and sometimes you meet adversaries who are heavily armed and well financed, and if you’re going to win, you have to fight them and it costs money. This was an outrageous wrong committed by the Bank of New York Mellon, and plaintiffs’ counsel deserve a world of credit for taking it on, for running the risk, for financing it and doing a great job.