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.