BNY Mellon nears $700-plus million forex cases settlement - source

(Reuters) - Bank of New York Mellon Corp is nearing an agreement to pay just over $700 million to settle allegations that the bank overcharged pension funds and other clients for foreign exchange services, according to a person familiar with the probe.

The settlements would resolve lawsuits filed by New York state and federal authorities claiming that BNY Mellon told clients it would provide them with the best possible execution, but instead gave them the worst rates of the day. Meantime, BNY Mellon obtained better spot prices for itself and profited on the spread, they said.

Spokespersons for the bank, Manhattan U.S. Attorney Preet Bharara, whose office is handling the federal lawsuit, and New York Attorney General Eric Schneiderman, declined to comment.

Other cases involving BNY Mellon's foreign exchange practices would also be resolved by the settlements.

Schneiderman's lawsuit claimed that the bank earned $2 billion over ten years through the alleged deception. A separate U.S. Department of Justice lawsuit said the bank defrauded clients of hundreds of millions of dollars through the scheme between 2000 and the lawsuit's filing in 2011.

BNY Mellon disclosed last month that it would take a $598 million charge as it tried to resolve matters including "substantially all" foreign exchange litigation it faced, though it did not specify which cases.

Last month, amid settlement discussions, U.S. District Judge Lewis Kaplan ordered that document and evidence production in federal lawsuits pending before him against BNY Mellon be put on hold until March 17.

The cases include United States v. Bank of New York Mellon, U.S. District Court, Southern District of New York, No. 11-06969, and People of the State of New York v. Bank of New York Mellon, New York State Supreme Court, New York County, No. 114735/2009.

(Reporting By Karen Freifeld and Nate Raymond in New York. Additional reporting by Jonathan Stempel.; Editing by Christian Plumb)