(RTTNews) - The Bank of New York Mellon Corp. (BK: News ) Tuesday was slapped with a lawsuit by Attorney General Eric Schneiderman and the City of New York, accusing the Bank of defrauding its clients in foreign currency exchange transactions.
The lawsuit relates to foreign exchange transactions executed by the Bank pursuant to its Standing Instruction program or SI Program. Under the SI program, the bank's clients directly or through their investment managers, pre-authorized the Bank to execute certain types of foreign exchange transactions for them.
New York Mellon is charged with doing the exact opposite of what it had led its clients to believe. While it had assured clients that it would provide the best interbank rates, the suit alleges that the bank gave the worst or nearly the worst rates of the trading day. The malfeasance has been alleged to have been committed over a ten-year period.
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