Virginia Attorney General Ken Cuccinelli has filed a lawsuit against the bank of New York Mellon charging the major financial institution with defrauding state and local pension funds. The suit seeks $900 million in damages and penalties, The Washington Post
The suit alleges that since 2000 the bank defrauded the Virginia Retirement System and the pension funds in Arlington and Fairfax counties 73,000 times. “Now all of Virginia taxpayers are harmed,” the Republican attorney general told the Post. “If you assume the taxpayers are going to make good on whatever obligations these funds undertake, really the people who are going to be harmed by this as a particular matter are the taxpayers.”
The suit alleges that currency traders skimmed profits by falsely reporting the rate at which currency was exchanged. The bank disputes the charges.
“The lawsuit filed by the Virginia attorney general is unwarranted and reflects a flawed understanding of foreign currency markets,” Bank of New York Mellon spokesman Kevin Heine told the Post. “We will fight these claims in court and are confident we will prevail . . . While our first choice is always an amicable resolution, we refuse to be coerced into paying for and admitting to wrongdoing where none exists.”
Cuccinelli told the Post he has received calls about the suit from officials in other states with pension fund contracts with the bank.
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