The Florida Attorney General announced that Bank of New York Mellon (“BNY”) has agreed to pay $28 million to settle a Florida False Claims Act suit concerning foreign currency trades executed by BNY on behalf of the Florida Retirement System Trust Fund.
The case was one of several lawsuits filed under the qui tam provisions of state False Claims Act statutes by a longtime foreign currency trader at BNY’s Pittsburg office – Grant Wilson. Wilson was still employed by BNY at the time he blew the whistle, so in an attempt to shield his identity from BNY, he initiated the whistleblower suits filed in Florida, Virginia, and New York through a Delaware partnership called FX Analytics. Once the cases were unsealed, the Wall Street Journal identified Wilson as the whistleblower behind the qui tam suits.
The complaint in intervention filed by Florida Attorney General Pam Bondi alleges that BNY overcharged Florida’s pension fund by millions of dollars when it handled foreign currency transactions on behalf of the pension fund. In addition, it questioned recommendations by BNY to invest the pension fund in medium-term notes issued by Sigma Finance, Inc., which defaulted and ultimately went into receivership.
BNY’s settlement with Florida requires BNY to pay the state pension fund $28 million within the next two weeks, and pay $100,000 to the state for its legal fees. In addition, BNY will give a credit valued up to $500,000 per year for ten years on any fees charged to the state agency that oversees Florida’s state pension fund.