The Wall Street Journal reported that Virginia and Florida Attorney generals have filed civil suits against Bank of New York Mellon Corp (BK) accusing it of using a currency trading method that eventually cheated retirement funds.
The suits were filed on Thursday, with the Virginia lawsuit stating that bank officials knew of and endorsed such a method. The complaint refers to an e-mail from senior banker, Jorge Rodriguez, who claimed if the bank had to allow clients to monitor each trade as it was performed, that would result in a sudden reduction in the bank's margins, hurting profit.
In a statement, BNY Mellon said that the lawsuits were "unwarranted and reflect a flawed understanding of foreign currency markets. We will fight these claims in court and are confident we will prevail."
Bank of New York Mellon (NYSE:BK) has a potential upside of 55.5% based on a current price of $20.51 and an average consensus analyst price target of $31.9.