The Florida Attorney General’s Office announced a settlement in the qui tam fraud complaint filed against the Florida Retirement System’s custodian financial institution, the Bank of New York Mellon. BNYM is accused of overcharging the FRS by millions of dollars. This should be a relief for those of you in FRS. According to a statement released by AG Pam Bondi:
“Every penny that state and local employees entrust to Florida’s pension fund is hard-earned. Today, we announced that we reached a $28 million settlement with 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. This agreement provides full compensation for the State’s past foreign currency trades and ensures complete transparency on the pricing of future trades.
The settlement reached today 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.
“This case began as a 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, my office intervened in the case and filed an amended complaint.
“We worked hard to achieve this substantial recovery on behalf of Florida’s retirement fund.”