Currency Trading Lawsuit
In October, 2011, the Justice Department and New York's attorney general filed civil lawsuits against the Bank of New York, alleging foreign currency fraud. The suits hold that the bank deceived pension-fund clients by manipulating the prices assigned to them for foreign currency transactions. Allegedly, the bank selected the day's lowest rates for currency sales and highest rates for purchases, appropriating the difference as corporate profit. The scheme is said to have generated $2 billion for the bank, at the expense of millions of Americans' retirement funds, and to have transpired over more than a decade. Purportedly, the bank would offer secret pricing deals to clients who raised concerns, in order to avoid discovery. Bank of New York has defended itself vigorously, maintaining the fraud accusations are "flat out wrong" and warning that as the bank employs 8,700 employees in New York, any damage to the bank would have negative repercussions for the state of New York.
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