8-KOther Events

Bank of New York Mellon Corp 8-K Report, Corporate Update (May 21, 2015)

Filed May 21, 2015For Securities:BKBK-PKBNYBNY-PK

Summary

The Bank of New York Mellon Corporation (BK) filed an 8-K on May 21, 2015, to disclose a settlement in principle for a foreign exchange (FX)-related class action lawsuit. This significant development addresses previously disclosed securities law violation claims. The settlement involves a payment of $180 million and will result in a pre-tax charge of $50 million in the second quarter of 2015. This settlement is expected to resolve virtually all pending FX-related actions, excluding claims from individual customers, bringing a degree of closure to a material legal overhang. While the payment represents a notable expense, investors should view this as a step towards resolving past litigation and allowing the company to focus on its core operations. The resolution is subject to court approval.

Key Highlights

  • 1BNY Mellon reached a settlement in principle for a foreign exchange-related putative class action lawsuit.
  • 2The settlement involves a payment of $180 million.
  • 3A pre-tax charge of $50 million will be recognized in the second quarter of 2015.
  • 4The settlement aims to provide a full release of all FX-related securities law claims by the alleged class.
  • 5This resolution is expected to settle virtually all currently pending FX-related actions.
  • 6Several lawsuits brought by individual customers remain outside the scope of this settlement.
  • 7The settlement is subject to court approval.

Frequently Asked Questions

The primary purpose of this 8-K filing is to announce that The Bank of New York Mellon Corporation has reached a settlement in principle for a significant foreign exchange-related class action lawsuit concerning alleged securities law violations.

BNY Mellon will pay $180 million to settle the lawsuit. This will result in a pre-tax charge of $50 million being recorded in the company's second quarter 2015 financial results.

This settlement is expected to resolve virtually all of the currently pending foreign exchange-related class action lawsuits asserting securities law violations. However, it specifically excludes several lawsuits brought by individual customers, meaning some legal matters may still persist.

The settlement has been reached in principle as of May 20, 2015, and the filing was made on May 21, 2015. However, the settlement is contingent upon receiving formal court approval.