Reuters: US Dollar Report: UPDATE 1-BNY Mellon wins dismissal in Virginia FX fraud case

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UPDATE 1-BNY Mellon wins dismissal in Virginia FX fraud case May 1st 2012, 22:19 Tue May 1, 2012 6:19pm EDT BOSTON May 1 (Reuters) - A Virginia state judge on Tuesday dismissed a lawsuit that accused BNY Mellon Corp of overcharging on foreign exchange trades for pension funds in that state. Terrence Ney, a state judge in Fairfax County, said the pension funds, including the Virginia Retirement System, did not show evidence that they submitted claims for payment in connection with their allegations of overcharging on forex trades. A claim for payment is an essential part of proving a fraudulent action under the Virginia Fraud Against Taxpayers Act, the judge said in his ruling. BNY was accused of adding hidden markups to foreign exchange trades for the Virginia funds, which did not involve any bills being sent to the bank, Ney wrote. "Accounting records or statements in and of themselves do not amount to a claim," the judge noted. "The court cannot rewrite the (Virginia Fraud Against Taxpayers Act) in order to have it comport with what the court believed the act may be trying to address," the judge added later in the decision. BNY, the world's largest custody bank, said in a statement that the decision vindicated its "position that the claims were without merit. This decision and the recent dismissal of similar whistleblower claims in California underscore our long held belief that these cases will not withstand legal scrutiny." BNY Mellon's forex business has been the subject of several lawsuits in which the bank has been accused of overcharging pension fund clients on certain trades. The U.S. Attorney in Manhattan accused the bank of committing $1.5 billion in fraud. The bank has denied any wrongdoing.

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