Attorney General Pam Bondi News Release
November 1, 2013
Contact: Whitney Ray
Phone: (850) 245-0150
Attorney General Pam Bondi Announces $28 Million Settlement with Bank of New York Mellon
(Revised 1/3/14) TALLAHASSEE, Fla. – Attorney General Pam Bondi has reached a settlement with the State of Florida’s custodian bank, the Bank of New York Mellon, resolving allegations that the bank overcharged the Florida Retirement System Trust Fund by millions of dollars in its handling of foreign currency transactions. The resolution provides full compensation for the State’s past foreign currency trades and ensures complete transparency on the pricing of future trades. Florida has billions of dollars in international investments that require foreign currency transactions. The settlement also resolves allegations involving investments made by the Bank of New York Mellon on behalf of the Florida Retirement System Trust Fund in medium-term notes issued by Sigma Finance, Inc. Sigma defaulted on certain notes in late September 2008 and subsequently went into receivership. The agreement calls for a total, unallocated payment of $28 million to resolve both the foreign currency exchange and Sigma claims.
“We worked hard to achieve this substantial recovery on behalf of Florida’s retirement fund,” said Attorney General Pam Bondi.
The case began as a qui tam, or whistleblower, complaint that alleged the bank improperly reported the State’s foreign currency transactions and kept the difference between that inflated price and the actual execution price. In 2011, the Attorney General’s Office intervened in the case and filed an amended complaint.
Qui tam actions are brought under the Florida False Claims Act. The Act authorizes a private person, or “relator,” who claims to have knowledge of fraud involving public funds to bring a sealed case on the State’s behalf. The Attorney General’s Office then has the opportunity to investigate the allegations, gather additional information, and intervene in and proceed with the case if appropriate. In 2013, the Legislature amended the Act to strengthen the Office of the Attorney General’s ability to conduct its own False Claims Act investigations.
Follow this link to view a copy of the settlement: http://myfloridalegal.com/webfiles.nsf/WF/MMFD-9CZRXF/$file/BNYMELLON.pdf