SEC Awards Record Payout of Nearly $50 Million to Whistleblower on BNY Mellon Currency Trading Abuses
Posted on 06/05/2020
The Bank of New York Mellon Corporation (BNY Mellon) continues to get fined by the U.S. Securities and Exchange Commission (SEC) over bad behavior. This time the SEC announced a nearly US$ 50 million whistleblower award to an individual who provided detailed, firsthand observations of misconduct by a company, which resulted in a successful enforcement action that returned a significant amount of money to harmed investors. This is the largest amount ever awarded to one individual under the SEC’s whistleblower program. The next largest whistleblower award was back in 2018 and was US$ 39 million. According to the SEC, “No money has been taken or withheld from harmed investors to pay whistleblower awards.”
The SEC’s 2016 settlement with BNY Mellon ordered the bank to pay about US$ 163 million in fines.
A former trader at BNY Mellon, Grant Wilson, informed government authorities that the bank had a pattern of overcharging big clients on currency trades. Wilson helped the U.S. government for 2 years, while working as a currency trader at the bank. BNY Mellon had told customers its service was “free of charge”. BNY Mellon was giving some of these large public fund clients the least-favorable exchange rates of the day, profiting from the difference. Some of these clients that were defrauded include public pensions.
