Summary
This Current Report on Form 8-K filed by The Bank of New York Mellon Corporation (BK) on February 8, 2016, primarily serves to re-file its Fourth Quarter 2015 Earnings Release (Exhibit 99.1) which was originally furnished on January 21, 2016. The filing also provides crucial updates on ongoing legal proceedings. Investors should pay close attention to the details of these litigations, as they represent potential financial and reputational risks for the company. The company is facing significant legal challenges in Brazil related to its subsidiary DTVM acting as administrator for investment funds associated with the Brazilian postal workers' pension fund, Postalis. Multiple lawsuits allege failures in due diligence, oversight of fund managers, and improper contributions to investment losses. Additionally, BNY Mellon is facing class action lawsuits in the U.S. concerning its foreign exchange pricing practices in its role as a depositary bank for foreign companies.
Key Highlights
- 1BNY Mellon re-filed its Q4 2015 Earnings Release (Exhibit 99.1), originally issued January 21, 2016.
- 2The company is involved in multiple lawsuits in Brazil concerning its subsidiary DTVM's role as administrator for Postalis pension funds.
- 3Allegations in the Brazilian litigation include failure to perform duties, improper due diligence, and contributing to investment losses.
- 4BNY Mellon is facing new putative class action lawsuits in the U.S. filed in late December 2015 and January 2016.
- 5The U.S. lawsuits relate to BNY Mellon's foreign exchange pricing for dividend and distribution conversions in its depositary receipt services.
- 6Key claims in the U.S. litigation include breach of contract and violations of ERISA.
- 7The legal proceedings are in their early stages, with outcomes and potential financial impact yet to be determined.