Forex Fraud Claims Just Keep Coming


The Wall Street Journal is reporting that the Arkansas Teacher Retirement System has filed a putative class action lawsuit against State Street Corp. alleging that the bank overcharged the it and other similarly situated customers in foreign exchange (Forex) currency transactions. See article by Jeanette Neumann, “State Street Is Sued by Arkansas Fund.” The suit was filed on February 10, 2011 in the U.S. District Court for the District of Massachusetts.

The Arkansas Teacher Retirement System is a defined benefit pension plan that covers more than 115,000 employees and 343 employers.

According to the complaint, State Street Bank is the custodian for over 40% of public pension funds in the United States (the largest such custodian in the country), and has approximately $4.4 trillion in pension assets under custody worldwide.

The bank allegedly charged customers inflated Forex rates when buying foreign currency, credited customer at deflated Forex rates when selling foreign currency, and pocketed the difference. This activity allegedly generated $500 million in profits annually for State Street, about half of its Forex profits for the last ten years.

This action is the latest of several filed against State Street Bank and Bank of New York Mellon alleging Forex gouging.

The California attorney general’s suit against State Street was unsealed in October 2009. This apparently led to attempts by the Arkansas fund and other institutions to obtain information from State Street concerning foreign-exchange trades and costs. The “receipt of information from State Street has been delayed several times,” according to the Arkansas fund.

In addition to the California suit, Virginia intervened in a whistleblower suit against Bank of New York Mellon Corp., and Florida said last week it intends to intervene in a similar suit against BNY Mellon, according to the article.

In addition, major investment firms, like BlackRock Inc., are scrutinizing the rates they have been charged for Forex transactions, according to the Wall Street Journal.

Page Perry is an Atlanta-based law firm with over 125 years collective experience representing institutional and individual investors in commodities and securities related litigation and arbitration all over the country. While past results are not indicative of future success, Page Perry’s attorneys have recovered over $1,000,000 for clients on more than 40 occasions.