class action suit against BNY Mellon

Document Sample
class action suit against BNY Mellon Powered By Docstoc
					                                      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
                                                                                                                                                   LAND INVOLVED.

           (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

                   610 667-7706
     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):
 VI.                                        §~1_3_32-7{d-,-)_an_d_2_8_U_,S_,C_'.;;,§_13_9_1{:...b):.;,(l-,-)_an_d_{:..,:2)
              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)
                                                       (See instructions):
                  IF ANY                                                       JUDGE	                                                                          DOCKET NUMBER

     March        7,2011

      RECEIPT #
                     - - - - AMOUNT - - - - - -                                       APPL YING IFP	
                                                                                                          -----                                JUDGE
                                                                                                                                                       -----                       MAG. JUDGE
         Case 2:11-cv-01628-TON Document 1              Filed 03/07/11 Page 2 of 16

                        UNITED STATES DISTRICT COURT



individually and on behalf of all others             CLASS ACTION COMPLAINT

similarly situated,


                           v.                        JURY TRIAL DEMANDED



       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.


       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.


         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.


        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.
                    of 1.0795.

        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.


        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


        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

Class members.

       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

23(b)(I) because:

               (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


                                        COUNT I

                                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.

                                         COUNT II
                                    UNJUST ENRICHMENT

         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



       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.


       Plaintiff hereby demands a jury trial.

Dated: March 7, 2011                             Respectfully submitted,

                                                 BARROWAY TOPAZ KESSLER MELTZER &
                                                 CHECK, LLP

                                                  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
                                                 Brad Seidel
                                                 205 Linda Drive
                                                 Daingerfield, TX 75638
                                                 Tel: (903) 645-7333
                                                 Fax: (903) 645-5389
                                                 Additional Counsel


Shared By:
Description: full details of class action suit against BNY Mellon