BNY Mellon failed to protect retirement savings, lawsuit claims
A Bank of New York Mellon Corp. employee filed a lawsuit on Friday against the bank and about 30 directors and executives on the grounds that they breached fiduciary duties by failing to prevent a 401(k) retirement savings plan from losing millions of dollars since 2008.
Isabel F. Sansano of New Jersey asked in the five-count lawsuit filed in federal court in Pittsburgh that the bank and its co-defendants repay the plan for losses resulting from "imprudent" investments and restore profits to the retirement savings plan. The suit seeks payment of damages.
Sansano, who is asking that the lawsuit be certified as a class action, contends the plan lost money because it invested heavily in the bank's stock, which plunged in value due to mismanagement by some bank executives and directors.
The lawsuit claims the stock dropped from a high of $49.40 on Jan. 3, 2008, to a closing price of $18.97 a share as of Oct. 14.
The 64-page lawsuit contends the stock dropped in value because of BNY Mellon's alleged practice of overcharging foreign currency trading clients, which was revealed through lawsuits filed by the attorneys general of Virginia, Florida and New York.
The Department of Justice and Massachusetts securities regulators filed separate cases against the bank, alleging it defrauded clients by overcharging them by $2 billion over the past decade.
Under the Employee Retirement Income Security Act, the defendants must repay the plan for a breach of fiduciary duty, the lawsuit states. The plan is administered in Pittsburgh, according to the lawsuit.
Pittsburgh attorney Gerald L. Rutledge, who represents Sansano, and BNY Mellon spokesman Ron Gruendl declined to comment on the lawsuit.
Also named in the suit are the bank's benefits committee; plan administration members Robert Perego, Lisa B. Peters, John A. Park and 10 other unidentified people; investment committee member Leo P. Grohowski and 10 unidentified committee members; plus 10 unidentified monitoring committee members.
The lawsuit claims members of those committees breached their fiduciary duty by failing to manage the plan's assets prudently.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.