A recent filing by the U.S. Justice Department alleges that financial firms paid millions to a unit of Bank of New York Mellon
that defrauded clients on FOREX trades, reports
the Boston Herald
. Fidelity Investments
, Manulife/John Hancock
], Raytheon, and Natixis
] are some of the companies that paid BNYM.
The Justice Department's filing states that "[t]he Bank of New York Mellon (engaged) from at least 2000 through 2011 ... in a scheme to defraud custodial clients who used BNYMís standing-instruction foreign-exchange service."
The BNYM unit generated around $1.5 billion of FOREX fees from 200 clients between 2007 and 2010, regulators said. Fidelity was one of BNYM's top customers, spending over $55 million on trades in that time.
A separate lawsuit was filed by Massachusetts officials claiming that around $29 million was spent on "questionable foreign-exchange fees."
Kevin Heine, a BNY Mellon spokesperson, said these accusations stemmed from "a fundamental misunderstanding of the foreign-exchange market."
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