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Administration October 5, 2011
BNY Mellon Now Targeted by ERISA “Investigation”
October 5, 2011 (PLANSPONSOR.com) – Having drawn the scrutiny of regulators, Bank of New York Mellon now finds itself the target of another investigation.
Reported by PLANSPONSOR staff
Today the New York-based law firm of Harwood Feffer LLP said that it is “investigating possible violations of the Employee Retirement Income Security Act of 1974 (“ERISA”) by the Bank of New York Mellon Corporation (“BNY”) (NYSE: BK) and certain of its officers, directors, and employees”.
Specifically, Harwood Feffer says it is investigating whether certain fiduciaries of the Bank of New York Mellon Corporation 401(k) Savings Plan (the “Plan”) may have breached their fiduciary duties under ERISA to the Plan and its participants and beneficiaries by continuing to invest the Plan’s assets in BNY common stock when it was no longer prudent to do so.
The law firm cited the October 4 announcement that New York Attorney General Eric Schniederman and United States Attorney for the Southern District of New York Preet Bharara had filed separate lawsuits against BNY accusing it of overcharging state and other pension funds on foreign exchange fees and defrauding customers in the foreign exchange markets (see BNY Mellon Sued by U.S. and NY). The New York Times reported that Attorney General Schneiderman is seeking approximately $2 billion from BNY while U.S. Attorney Bharara is seeking “hundreds of millions of dollars” in connection with the wrongdoing, according to Harwood Feffer.
The law firm also noted that since July 2011, BNY has additionally been sued by the Attorneys General of Florida and Virginia as well as at least one pension plan for the same conduct. “Investigations have been opened in several other states as well as by the Securities and Exchange Commission and the Department of Justice. During the same period, the share price of BNY common stock has fallen approximately 30%,” it noted.
A BNY Mellon spokesperson noted that “BNY Mellon contracts with an independent fiduciary to make all decisions regarding whether the company’s common stock should be an investment option in the savings plan.”
More information about the investigation is available at http://www.hfesq.com.