Case 2:11-cv-01628-TON Document 1 Filed 03/07/11 Page 1 of 16
""'JS 44 (Rev. 12/07) CIVIL COVER SHEET
The JS 44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law, except as provided
by local rules of court. This form, approved by the Judicial Conference ofthe United States in September 1974, is required for the use of the Clerk of Court for the purpose of Initiating
the civil docket sheet. (SEE INSTRUCTIONS ON THE REVERSE OF THE FORM.)
I. (a) PLAINTIFFS DEFENDANTS
Southeastern Pennsylvania Transportation Authority, on behalf of itself Bank of New York Mellon Corporation
and all others similarly situated
(b) County of Residence of First Listed Plaintiff Philadelphia
County of Residence of First Listed Defendant _N_e_w_Y_o_rk _
(EXCEPT IN U.S. PLAINTIFF CASES)
(IN U.S. PLAINTIFF CASES ONLY)
NOTE: IN LAND CONDEMNATION CASES, USE THE LOCATION OF THE
(c) Attorney's (Finn Name, Address, and Telephone Number)
Attorneys (If Known)
Barroway Topaz Kessler Meltzer & Check, LLP
280 King of Prussia Road, Radnor, PA 19087
II. BASIS OF JURISDICTION (Place an "X" in One Box Only) III. CITIZENSHIP OF PRINCIPAL P ARTIES(Place an "X" in One Box for Plaintiff
(For Diversity Cases Only) and One Box for Defendant)
o I U.S. Govemment o 3 Federal Question PTF DEF PTF DEF
Plaintiff (U.S. Government Not a Party) Citizen of This State ~ 1 0 I Incorporated or Principal Place l!!l 4 0 4
of Business In This State
o2 U.S. Govemment a 4 Diversity Citizen of Another State o 2 a 2 Incorporated and Principal Place o 5 l!'I 5
Defendant of Business In Another State
(Indicate Citizenship of Parties in Item Ill)
Citizen or Subject of a o 3 o 3 Foreign Nation o 6 0 6
Forei n Count
IV NATURE OF SUIT (Place an "X" in One Box Onlv)
CONTRACT T'.0R!fS KOR'FEll'IJRElBEliIlJmIY 'BN11111ilUJP:rCY OTHER STATUTES
o II 0 Insurance PERSONAL INJURY PERSONAL INJURY o 610 Agriculture o 422 Appeal 28 USC 158 0 400 State Reapportionment
o 120 Marine 0 310 Airplane 0 362 Personal Injury o 620 Other Food & Drug o 423 Withdrawal 0 410 Antitrust
o 130 Miller Act 0 315 Airplane Product Med. Malpractice o 625 Drug Related Seizure 28 USC 157 0 430 Banks and Banking
o 140 Negotiable Instrument Liability 0 365 Personal Injury of Property 21 USC 881 0 450 Commerce
o 150 Recovery of Overpayment 0 320 Assault, Libel & Product Liability o 630 Liquor Laws ~ll.rWERTv RJ :I-ITS 0 460 Deportation
& Enforcement ofJudgment Slander 0 368 Asbestos Personal o 640 R.R. & Truck o 820 Copyrights 0 470 Racketeer Influenced and
o 151 Medicare Act 0 330 Federal Employers' Injury Product o 650 Airline Regs. o 830 Patent Corrupt Organizations
o 152 Recovery of Defaulted Liability Liability o 660 Occupational o 840 Trademark 0 480 Consumer Credit
Student Loans 0 340 Marine PERSONAL PROPERTY SafetylHealth 0 490 CablelSat TV
(Excl. Veterans) 0 345 Marine Product 0 370 Other Fraud 0690 Other 0 810 Selective Service
o 153 Recovery of Overpayment Liability 0 371 Truth in Lending ,ABOR SOCIA .sE ORl fV 0 850 Securities/Commoditiesl
of Veteran's Benefits 0 350 Motor Vehicle 0 380 Other Personal o 710 Fair Labor Standards o 861 HIA (1395fl) Exchange
o 160 Stockholders' Suits 0 355 Motor Vehicle Property Damage Act o 862 Black Lung (923) 0 875 Customer Challenge
o 190 Other Contract Product Liability 0 385 Property Damage o 720 LaborlMgmt. Relations o 863 DIWC/DIWW (405(g)) 12 USC 3410
o 195 Contract Product Liability 0 360 Other Personal Product Liability o 730 Labor/Mgmt.Reporting o 864 ssm Title XVI III 890 Other Statutory Actions
o 196 Franchise Iniury & Disclosure Act o 865 RSI (405(g» 0 891 Agricultural Acts
I REAL PROPERTY CIVIL RIGHTS PRISONER PETITIONS o 740 Railway Labor Act FEDERAL TAX SUlTS 0 892 Economic Stabilization Act
o 210 Land Condemnation 0 441 Voting 0 510 Motions to Vacate o 790 Other Labor Litigation o 870 Taxes (U.S. Plaintiff 0 893 Environmental Matters
o 220 Foreclosure 0 442 Employment Sentence o 791 Empl. Ret. Inc. or Defendant) 0 894 Energy Allocation Act
o 230 Rent Lease & Ejectment 0 443 Housing! Habeas Corpus: Security Act o 87 I IRS-Third Party 0 895 Freedom ofInformation
o 240 Torts to Land Accommodations 0 530 General 26 USC 7609 Act
o 245 Tort Product Liability 0 444 Welfare 0 535 Death Penalty IMM1GRATION 0 900Appeal of Fee Determination
o 290 All Other Real Property 0 445 Amer. wlDisabilities 0 540 Mandamus & Other o 462 Naturalization Application Under Equal Access
Employment 0 550 Civil Rights o 463 Habeas Corpus to Justice
0 446 Amer. wlDisabilities • 0 555 Prison Condition Alien Detainee 0 950 Constitutionality of
Other o 465 Other Immigration State Statutes
0 440 Other Civil Rights Actions
V. ORIGIN (Place an "X" in One Box Only) Appeal to District
~ 1 Original o 2 Removed from 0 3 Remanded from o 4 Transferred from 0 6 Multidistrict
Reinstated or 0 5 o 7 Judge from
Proceeding State Court Appellate Court Reopened another dlstnct Litigation
s eel Jud ment
Cite the U.S. Civil Statute under which you are filing (Do not cite jurisdictional statutes unless diversity):
CAUSE OF ACTION b28~U~.:-S,_C~, _
Brief description of cause:
VII. REQUESTED IN ~ CHECK IF THIS IS A CLASS ACTION DEMAND $ To be determined at CHECK YES only if demanded in complaint:
COMPLAINT: UNDER F.RC.P. 23 trial, but not less than $5 million. JURY DEMAND: Ilf Yes 0 No
VIII. RELATED CASE(S)
IF ANY JUDGE DOCKET NUMBER
FOR OFFICE USE ONLY
- - - - AMOUNT - - - - - - APPL YING IFP
----- MAG. JUDGE
Case 2:11-cv-01628-TON Document 1 Filed 03/07/11 Page 2 of 16
UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
SOUTHEASTERN PENNSYLVANIA CIVIL ACTION NO.
individually and on behalf of all others CLASS ACTION COMPLAINT
v. JURY TRIAL DEMANDED
THE BANK OF NEW YORK MELLON
Plail1tiff Southeastern Pennsylvania Transportation Authority ("SEPTA"), individually
and on behalf of all other persons similarly situated, by its undersigned attorneys, alleges the
following against Defendant The Bank of New York Mellon Corporation ("BNY Mellon" or the
"Company") based upon informatiol1 and belief al1d the investigation of counsel, except as to the
allegations pertaining specifically to Plaintiff that are based on personal knowledge. SEPTA
incorporates by referel1ce the allegatiol1s set forth in the operative complaints filed in
Commonwealth of Virginia, ex reI. FX Analytics v. The Bank of New York Mellon Corp., No.
CL-2009-15377 (Va. Cir. ll11sealed Jan. 21, 2011) (the "Virginia Action") and State of Florida,
ex reI. FX Analytics v. the Bank ofNew York Mellon Corp., No. 2009-ca-4140 (Fla. Cir. unsealed
Feb. 7, 2011) (the "Florida Action").
Case 2:11-cv-01628-TON Document 1 Filed 03/07/11 Page 3 of 16
1. BNY Mellon through its headquarters in New York, New York, serves as the
custodian for a number of institutiol1S in the United States. The Company t011tS itself as "the
world's largest global custodian" and has over $24 trillion in assets under custody.
2. As a custodian, BNY Mellon is respol1sible for, inter alia, executing-through its
FX Desk-foreign currency exchange ("FX") transactions l1ecessary to facilitate a client's
pl1rchases or sales of foreign securities or assets, the repatriation of foreign funds, or the
execution of currency hedging transactions.
3. As detailed in the Florida and Virginia Actions, from at least 2000, and
continuing through the present day, BNY Mellon has manipulated FX transactions executed by
the Company in order to maximize profits to BNY Mellon at the expense of the Company's
clients, such as SEPTA.
4. In essence, BNY Mellon charges its clients (1) inflated FX rates when buying
foreign currency, and (2) deflated FX rates when selling foreign currency. The rate BNY Mellon
actually charges clients is set after a FX transaction is executed and after the Company has an
opportunity to observe post-execlltion changes in the FX currency market. The difference
between the actual FX transaction price and the amount ultimately charged to BNY Mellon's
clients is pocketed by the Conlpany as profit.
5. BNY Mellon's practices remained unknown to Plaintiff and the Class llntil the
Florida and Virginia Actions were 11nsealed because, inter alia, the account statements provided
to BNY Mellon's clients failed to provide pertinent details including time stamps for each FX
transaction. Without FX time stamps, clients were 1111able to verify that the FX rates charged by
BNY Mellon were COl1sistent with the actual FX rates at the time the FX transactions were
Case 2:11-cv-01628-TON Document 1 Filed 03/07/11 Page 4 of 16
executed. Moreover, according to the Florida Action, in order to avoid detection of its conduct
the Company provided its clients aCCOllllt statenlellts that showed FX rates that fell within the
daily trading range. BNY Mellon also used employees located in New York and Pittsbllrgh to
hold "reconciliation" calls to "choose foreign exchange rates, i.e., the Falsified FX Rates, of the
false price to cllarge" the Company's clients.
6. BNY Mellon's actions have generated hundreds of millions of dollars annually in
unwarrallted profits - wrongly taken from BNY Mellon's clients - and may account for nlore
than one-half ofBNY Mellon's entire annual FX trading profits.
7. SEPTA brings this suit as a class action on behalf of all similarly affected clients
of BNY Mellon (the "Class"). The Class excludes those government pension funds that are
covered by independent qui tam actions that have been unsealed, or that become unsealed during
the pendency of this action. This action seeks to recover proceeds unlawfully obtained through
BNY Mellon's unfair FX trading practices as well as an order providing injunctive relief.
II. JURISDICTION AND VENUE
8. This Court has subject matter jurisdiction over this action pursuallt to the Class
Action Fairness Act of 2005 ("CAFA"), 28 U.S.C. § 1332(d), because this is a class action in
which: (1) there are hundreds (if not thousands) of proposed Class members; (2) many class
members of the proposed Class are citizens of States other than that of the Defendant; and (3) the
claims of the proposed Class members exceed $5,000,000 ill the aggregate.
9. Venue in this judicial District is proper under 28 U.S.C. § 1391(b)(I) and (2). A
substantial part of the events or omissions giving rise to the claims occurred within this District.
Defendant transacts busilless in this District and maintains substantial operations within the
Commonwealth of Pennsylvania.
Case 2:11-cv-01628-TON Document 1 Filed 03/07/11 Page 5 of 16
10. SEPTA is a regional public transportation authority servIng Bucks, Chester,
Delaware, Montgomery, and Philadelphia COllnties. SEPTA's principal offices are located in
Philadelphia, PA. SEPTA retained BNY Mellon to provide custodian services for the benefit of
SEPTA's employee pension benefit plans. Dllring the relevant time period, BNY Mellon
execllted hundreds ofFX transactions on SEPTA's behalf.
11. Defendant BNY Mellon is a Delaware corporation headquartered ill New York.
BNY Mellon mailltains its principal place of business at One Wall Street, New York, NY 10286.
The Company has several offices in the Commonwealth of Pemlsylvania.
12. BNY Mellon is a global financial services company that provides various
financial services for institutions, corporations, and higll-net-worth illdividuals. Additionally,
BNY Mellon provides custodial and FX services-through its FX Desk-to SEPTA and the
13. BNY Mellon's agreement with SEPTA ackIl0wledges that BNY Mellon is a
fiduciary of SEPTA. The agreemellt also provides BNY Mellon with all powers necessary for
the protection of SEPTA's assets.
IV. BNY MELLON'S FX TRANSACTION PRACTICES
14. BNY Mellon holds itself out on its website as the "world's largest global
custodian" and represents that it 11as in excess of $20 trillion in assets under custody.
15. One ofBNY Mellon's primary business lines provides custodian banking services
for a nllmber of clients across the world. A function of its custodian services includes execution
of transactions in securities traded olltside of the United States. Execllting such trades requires
Case 2:11-cv-01628-TON Document 1 Filed 03/07/11 Page 6 of 16
BNY Mellon to covert U.S. dollars ("USD") into a foreign currency and vice versa when the
funds are being returned to the United States.
16. According to BNY Mellon's third quarter 2010 Form 10-Q, as of Septen1ber 30,
2010, BNY Mellon had generated $628 million in "foreign exchange and other trading revenue"
year-to-date. Additionally, BNY Mellon's 2009 Annual Report on Form 10-K indicates that
BNY Mellol1 generated $1.04 billion and $1.46 billion in foreign exchange and other trading
revenue in 2009 and 2008, respectively.
17. BNY Mellon's website touts the Company's experIence, expertise, and
performance of its FX Desk al1d represents that it is "a highly capable provider for foreign
exchange sales, trading, e-commerce, and research services."
18. BNY Mellon's FX transactions on behalf of its clients were initiated both directly
and indirectly. In direct FX transactions, clients or third party investment managers
communicate trade requests to a BNY representative, who quotes a rate that the client or third
party investment manager can either accept or reject. If the rate is accepted, the FX transaction
is executed at the agreed upon price. In indirect FX transactions, when a trade requires the
purchase of foreign currency to fund a transaction, or when foreign currency needs to be
cOl1verted back to USD, BNY Mellon executes the FX transactions on the client's behalf. The
indirect method involves the custodian, rather tl1an the client, overseeing the trade process from
start to con1pletion. The client has little or no input in the FX transaction at any point in the
19. The FX transactions affected by BNY Mellon's actions described herein were
indirect FX transactions. Indirect FX transactions are also known as "standing instruction"
and/or "non-11egotiated" trades.
Case 2:11-cv-01628-TON Document 1 Filed 03/07/11 Page 7 of 16
20. Upon information and belief, until October 2009, BNY Mellon described indirect
FX trades as being "free of charge" and assured clients that such transactions were subject to
"best execution" standards-which reqllire BNY Mellon to obtain the best price for its clients.
BNY Mellon's representations were false.
v. BNY MELLON MANIPULATES FX TRADES
21. According to the complaints filed in the Virginia and Florida Actions, when BNY
Mellon received instructions to execute a foreign trade, it would convert funds from USD into a
foreign currency to complete the transaction. See} e.g., Virginia, Compi. ~62. After the trade
was executed, "[BNY Mellon] would note the low and high exchange rate of the day for the two
currencies involved in the FX trade." Id. ~63.
22. At the end of the trading day, BNY Mellon sinlply "ignored the price [it] paid for
the FX [conversiol1]" and charged its clients for the "FX transaction as if the trade occurred at
either the high or low of the day (depending on the nature of the transaction, buy or sell), in order
to charge [its clients] the least favorable rate tllat occurred that trading day." Id. ~64.
23. Accordingly, when clients where "buying" a foreign Cllrrency, BNY Mellon
would buy the currency at one rate but charge the clients a higher rate. See ide ~66. For "sales"
of FX currencies, BNY Mellon charged clients a lower conversion rate-retllming less ,currency
to its clients. Id ~69.
24. In either scenario, BNY Mellon simply pocketed the difference between the price
it paid for the currency and the amount debited or credited to clients' accounts.
25. The Wall Street Journal provided the following summary of how BNY converted
funds and then manipulated FX prices for a trade on behalf of one Virgil1ia pension fund:!
Carrick Mollenkamp, Lingling Wei, and Gregory Zuckennan, "Suit Alleges Mellon Created Fake Trades,
Overcharged," The Wall Street Journal (Feb. 4, 2011).
Case 2:11-cv-01628-TON Document 1 Filed 03/07/11 Page 8 of 16
Cu en r
Bank of New York Mellonallegedlypfofited by carrying out atrade for a pension
fund client giving thClnthe worst rate of the day. whilepockeUog the difference
between that rilte and the rate they :lttua1ty got.
1f . - 2 . . '" , ,- ': . "'.
Virginia Bank of New York Mellon BNY Virginia pension BNY Ina
pension fund re<eives instruction and Mellon fund, instead of Mellon negotlJted
ne-eds to sells $]25 million of gets getting ($13.5 profits trade. BNY
convert $125 pension fund money and tSl),5 million. re<:eives ($141.250 Mellon profit
mltion Into buys. CanadIan dollars in million. C513.35 million at would hJve
C<lnadian interbank market at 10682. the lowest , been about
dollars, USD/CAD conversion rate mtc of the day. C$6.250.
26. Upon information and belief, Plaintiff alleges that the foregoing illustration is
consistent with the manner in which BNY Mellon executed trades for all Class members.
27. BNY Mellon's manipulation ofFX rates was a companywide operation that "used
a foreign-exchange system called 'Charlie' to create fake trades and overcharge [its clients].,,2
Upon information and belief, the scheme also required coordination between BNY Mellon's
trading desks in Pittsburgh and New York in order to avoid detection. See Florida, Compi.
28. SEPTA's holdings include international assets that require FX transactions in
connection with the purchase and sale of securities. At no time has SEPTA authorized BNY
Mellon to charge SEPTA the false FX rates as alleged herein.
VI. BNY MELLON ACTIVELY CONCEALED ITS CONDUCT
29. In order to conceal its actions and avoid detection, BNY Mellon's account
statements to its clients reported FX conversion rates that fell within the high and low range for
each day's FX rates. BNY Mellon's account statements also failed to provide time stamped
Case 2:11-cv-01628-TON Document 1 Filed 03/07/11 Page 9 of 16
execLItion prices. The combination effectively precluded cliel1ts from discovering that the FX
rates they were being charged were maniplLlated by BNY Mellon.
30. BNY Mellon is in sole possessiol1 of records accurately detailing the manipulated
FX transactions and the FX rates actually incurred by BNY Mellol1 whel1 executing the FX
transactions for its clients.
31. SEPTA's account statements from BNY Mellon did not provide it with time
stamped FX trades. Because the account statements provided to SEPTA by BNY Mellon also
indicated FX rates that were within the daily range of FX rates, SEPTA was llnable to discover
BNY Mellon's conduct prior to the Florida and Virginia Actions becoming unsealed.
32. SEPTA was not aware, and BNY Mellon did not disclose, that the costs of the
reported FX transactions executed by BNY Mellol1 were not the actual FX costs incurred by
33. SEPTA was not aware, and BNY Mellon did not disclose, that BNY Mellon
would retain the difference between the actual FX rates and the less favorable manipulated FX
rates cl1arged to SEPTA by BNY Mellon.
34. SEPTA was not aware, and BNY Mellon did 110t disclose, that BNY Mellon
would take hidden fees or profits from the FX transactions they executed, including mark-ups or
mark-downs, when execlIting FX trades on SEPTA's behalf.
35. Pursuant to its agreement with SEPTA, BNY Mellon was not authorized to
manipulate FX transactions in the manner described 11erein.
36. BNY Mellon's practices affected all of BNY Mellon clients wl10se FX
transactions were indirectly executed by BNY Mellol1 during the relevant time period.
Case 2:11-cv-01628-TON Document 1 Filed 03/07/11 Page 10 of 16
VII. CLASS ACTION ALLEGATIONS
37. This action is brought and may properly be maintained as a class action pursuant
to Rules 23(a), 23(b)(1), 23(b)(2) and/or 23(b)(3) of the Federal Rules of Civil Procedure.
38. This suit is a class action brought on behalf of a Class of all public and private
pension fllnds, and any other trusts or funds for whom BNY Mellon served as the custodial bank
and executed FX transactions on an "indirect" or "custody" basis and which have suffered
damages as a result of tIle conduct alleged herei1l. The Class excludes any government pension
fund that is covered by independent qui tam actions that have been unsealed, or tllat become
unsealed during the pendency of this actio1l. This action is brought pursuant to Rule 23(b)(2) for
injunctive or declaratory relief, and Rule 23(b)(3) for money damages.
39. Also excluded from the Class are Defendant, any entity in which Defendant has a
controlling interest, a11d the officers, directors, affiliates, legal representatives, heirs, successors,
subsidiaries, and/or assigns of any such individual or entity.
40. The members of the Class are so numerous that joinder of all members
individually, in one action or otherwise, is impracticable.
41. There are questions of law and fact common to Plaintiff and the Class, including:
(a) Whether Defendants owed fiduciary duties to its clie1lts;
(b) Whether Defendant charged its clients incorrect FX rates and
improperly retained the margin between the actual and cllarged FX
(c) Whether Defendant provided account statements to its clients
that reported incorrect FX rates;
Case 2:11-cv-01628-TON Document 1 Filed 03/07/11 Page 11 of 16
(d) Whether Plaintiff and the Class suffered monetary damages as
a result of the Defendant's actions and if so, what is the proper
measure of those damages
(e) Whether the Class entitled to injunctive relief.
42. Plaintiff s claims are typical of the clainls of the members of the Class and it is a
member of the Class described herein.
43. SEPTA is willing and prepared to serve tIle proposed Class in a representative
capacity witll all of the obligations and duties material thereto. Plaintiff will fairly and
adequately protect the interests of the Class alld has 110 interests adverse to or which directly and
irrevocably conflict with the interests of other members of the class.
44. SEPTA's interests are co-extellsive with, and not antagonistic to, those of the
absent Class members. SEPTA will ul1dertake to represent and protect the interests of absent
45. SEPTA has engaged the serVIces of the lUldersigned counsel. Counsel is
experienced in complex class action litigation, will adequately prosecute this action, and will
assert and protect the rights of, and otherwise represel1t, the named Plaintiff and absent Class
46. The questions of law and fact common to the Class, as summarized above,
predonlinate over any questions affecting only individual members, in satisfaction of Rule
23(b)(3), and each such common question warrants class certification under Rule 23(c)(4).
47. A class action is superior to other available methods for the adjudication of this
controversy. Individualized litigation increases the delay and expense to all parties and the court
system given the complex legal alld factual issues of the case, and judicial determination of the
Case 2:11-cv-01628-TON Document 1 Filed 03/07/11 Page 12 of 16
common legal and factual issues essential to this case would be far more fair, efficient, and
economical as a class action maintained in this forum thal1 in piecemeal individual
48. Plaintiffknows of no difficulty tllat will be encountered in the management of this
litigation that would preclude its maintenal1ce as a class action. Compared to individualized
actions, the class action device presents far fewer management difficulties, and provides the
benefits of single adjudication, economy of scale, al1d comprehensive supervision by a single
49. Defendant 11as acted or refused to act on grounds generally applicable to the
Class, tllereby making appropriate final and injllnctive reliefwitll respect to the Class.
50. In the alternative, the above-referel1ced Class may be certified under Rule
(a) The prosecution of separate actions by the individual Class
members would create a risk of inconsistent or varyil1g
adjudication with respect to individual Class nlembers' clainls and
would establish inconlpatible standards of conduct for Defendant;
(b) The prosecution of separate actions by individual members of
the Class would create a risk of adjudications which would as a
practical matter, be dispositive of the interests of other members of
the class who are not parties to the adjudications, or which would
substantially impair or impede the ability of other Class members
to protect their interests.
Case 2:11-cv-01628-TON Document 1 Filed 03/07/11 Page 13 of 16
VIII. CLAIMS FOR RELIEF
BREACH OF FIDUCIARY DUTY
51. Plaintiff restates and incorporates the allegations contained in each paragraph
above as though fully set forth herein.
52. Defendant had substal1tial discretion and control over Plaintiffs and the Class's
assets and FX transactions.
53. This discretion and control gave rise to a fiduciary duty and duty of care on the
part of Defendant to Plaintiff and the Class.
a. Defendant occupied a superior position over Plaintiff and
the Class with respect to the execution of FX transactions, and had
superior access to confidential information about prevailing market
FX rates at the time FX transactions were actually executed.
b. Defendant's superior position necessitated that Plaintiff and
the Class repose their trust and confidence in Defendant to fulfill
its duties and properly execute FX transactions at the prevailing
market rate at the time of the transaction, and Plaintiff and the
Class did so place their trust and cOl1fidence in Defendal1t by
execllting FX transactions through Defendant.
c. Defendant held itself out as a provider of superior custodial
and FX trading services, and evinced an understanding that it was a
fiduciary of Plaintiff and the Class. Plaintiff and the Class
reasonably and foreseeably relied upon such representations, and
Case 2:11-cv-01628-TON Document 1 Filed 03/07/11 Page 14 of 16
trusted in Defendant's purported skill, expertise, and experience by
executing FX transactions through Defendallt.
54. As a fiduciary, Defelldant was required to discharge its obligations with respect to
Plaintiff and the Class (a) solely in the interest of Plailltiff and the Class, (b) for the exclusive
pllrpose of providing benefits to Plaintiff and the Class, (c) with the care, skill, prudence, and
diligence under the circumstances then prevailing that a prudent perSOll acting in a like capacity
and familiar with SUCll matters would use in the conduct of an enterprise of a like character and
with like aims, and (d) in accordance with the applicable documents and illstruments.
55. Defendant breached its fiduciary duties to Plaintiff and the Class by failing to
properly execute FX transactions, charging false FX rates, alld pocketing the difference between
the actual FX rates incurred by the Defendants and the false FX rates charged to Plaintiff and the
56. Plaintiff and the Class have been damaged as a direct and proximate result of
these breaches of fiduciary duty and are entitled to damages, and appropriate equitable relief,
illcluding accounting and imposition of a constructive trust.
57. Plaintiff restates and incorporates the allegations contained in each paragraph
above as though fully set forth herein.
58. Defendant benefitted from its unlawful acts, omISSIons and breaches of its
fiduciary duties to Plailltiff and the Class as detailed herein. These unlawful acts, onlissions and
fiduciary breaches caused Plaintiff alld the Class to suffer injury and monetary loss.
59. As a result of the foregoing, it is unjust and inequitable for Defendant to have
enriched itself through the mallipulation of FX trallsactions as described herein.
Case 2:11-cv-01628-TON Document 1 Filed 03/07/11 Page 15 of 16
60. Equity and good conscience require that Defendant disgorge all SUCll lUljUSt gains
and that Defendant should pay tIle amounts by whicll it was unjustly enriched to Plaintiff and the
Class in all amount to be determined at trial.
61. Plaintiff and the Class seek restitution from Defendant, and seek an order of this
Court disgorging all profits, benefits, and other such compensation obtained by Defendant
through its wrongful conduct and fiduciary breaches.
62. Plaintiff and tIle Class are entitled to the establishment of a constructive trust
impressed upon the benefits derived by Defendant fronl its unjust enrichment and inequitable
IX. PRAYER FOR RELIEF
WHEREFORE, Plaintiff requests the following:
a) Certification of this action as a class action, proper and maintainable pursuant to
Rule 23 of the Federal Rules of Civil Procedure and declaration of the proposed
named Plaintiff as proper Class representative;
b) Such preliminary and permanent equitable relief, includillg imposition of a
constructive trust, as is appropriate to preserve the assets wrongfully taken from
Plaintiff and the Class;
c) Compensatory, consequential, and general damages In an amount to be
determined at trial;
d) Disgorgement and restitution of all earnings, profits, compensation, and benefits
received by Defendant as a result of its 1111lawful acts, omissions, and practices;
Case 2:11-cv-01628-TON Document 1 Filed 03/07/11 Page 16 of 16
e) Punitive damages for each claim to the maximum extent available under the law
on aCCOl111t of the olltrageous nature of Defendant's willful and wanton disregard
for the rights of the Plaintiff and the Class;
t) Costs and disbursenlents of the action;
g) Pre- and post-judgment interest;
h) Reasonable attorneys' fees; and
i) Such other and further relief as this Court may deem just and proper.
x. JURY TRIAL DEMANDED
Plaintiff hereby demands a jury trial.
Dated: March 7, 2011 Respectfully submitted,
BARROWAY TOPAZ KESSLER MELTZER &
J H. Meltzer
ean M. Handler
Darren J. Check
Nallmon A. Amj ed
Ryan T. Degnan
280 King of Prussia Road
Radnor, PA 19087
Tel: (610) 667-7706
Fax: (610) 667-7056
Lead Counsel for PlaintiffSoutheastern
Pennsylvania Transportation Authority
NIX PATTERSON & ROACH, LLP
Jeffery J. Angelovich
Bradley E. Beckworth
205 Linda Drive
Daingerfield, TX 75638
Tel: (903) 645-7333
Fax: (903) 645-5389