BNY Mellon In Settlement On Currency Fraud Charges

Published January 18, 2012 4:09PM (EST)

NEW YORK (AP) — Bank of New York Mellon and the Justice Department have reached a partial settlement of charges that the bank defrauded customers by offering them unfavorable rates on currency transactions.

The settlement was announced Tuesday by the top federal prosecutor in Manhattan. The bank must tell customers how it comes up with currency exchange rates for customers who buy and sell foreign securities or receive foreign dividends.

A federal lawsuit filed in October alleged that the bank provided customers exchange rates at the outer margins of what banks offer to each other and made money on the difference, known as a spread.

By Salon Staff

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