With allegations mounting that banks have overcharged pension funds for foreign-exchange transactions, mutual funds are asking whether they are being gouged too.
The latest lawsuit was filed last week by the Southeastern Pennsylvania Transportation Authority, which accuses Bank of New York Mellon of bilking its pension fund for forex trades. The court case comes on the heels of similar suits charging that pension funds in four states were defrauded by BNY or a competitor, State Street Corp.
“If BlackRock can get ripped off and not know it, then anyone in that market can be a victim,” says Dennis Kelleher, CEO of Better Markets, a Wall Street watchdog group. “The recent revelations about the FX market suggest pervasive predatory conduct.”