BNY Mellon
The Bank of New York Mellon Corporation, commonly known as BNY Mellon, is an American banking and financial services corporation headquartered in New York City. The bank offers investment management, investment services, and wealth management services.[2] BNY Mellon was formed from the merger of The Bank of New York and the Mellon Financial Corporation in 2007. It is the world's largest custodian bank and securities services company,[3][4][5] with $1.8 trillion in assets under management and $45.7 trillion in assets under custody as of 2023.[6] It is considered a systemically important bank by the Financial Stability Board.
"BNY" redirects here. For other uses, see BNY (disambiguation).Company type
- Bank of New York (founded 1784)
- Mellon Financial (founded 1870)
July 1, 2007
- Alexander Hamilton
(Bank of New York) - Thomas Mellon
(Mellon Financial)
Worldwide
US$17.50 billion (2023)
US$4.088 billion (2023)
US$3.051 billion (2023)
US$1.974 trillion (2023)
US$409.9 billion (2023)
US$40.87 billion (2023)
c. 53,400 (December 2023)
Through its Bank of New York predecessor, it is the oldest bank in the United States and the first listed on the New York Stock Exchange. It is regarded as being among the oldest banks in the world, having been established in June 1784 by a group that included American Founding Father Alexander Hamilton.[7] T. Mellon and Sons Bank, was founded in Pittsburgh in 1869 by Thomas Mellon and his sons Richard and Andrew, the latter of whom later became Secretary of the US Treasury.[8] The bank replaced its name with Mellon National Bank in 1902.[8]
Controversies and legal issues[edit]
Foreign currency exchange issues[edit]
In October 2011, the U.S. Justice Department and New York's attorney general filed civil lawsuits against the Bank of New York, alleging foreign currency fraud. The suits held that the bank deceived pension-fund clients by manipulating the prices assigned to them for foreign currency transactions. Allegedly, the bank selected the day's lowest rates for currency sales and highest rates for purchases, appropriating the difference as corporate profit. The scheme was said to have generated $2 billion for the bank, at the expense of millions of Americans' retirement funds, and to have transpired over more than a decade. Purportedly, the bank would offer secret pricing deals to clients who raised concerns, in order to avoid discovery. Bank of New York defended itself vigorously, maintaining the fraud accusations were "flat out wrong" and warning that as the bank employed 8,700 employees in New York, any damage to the bank would have negative repercussions for the state of New York.[118][119]
Finally, in March 2015, the company admitted to facts concerning the misrepresentation of foreign exchange pricing and execution. BNY Mellon's alleged misconduct in this area includes representing pricing as best rates to its clients, when in fact they were providing clients with bad prices while retaining larger margins. In addition to dismissing key executives, the company agreed to pay a total of US$714 million to settle related lawsuits.[120]
In May 2015, BNY Mellon agreed to pay $180 million to settle a foreign exchange-related lawsuit.[121]
In May 2016, multiple plaintiffs filed suit against the bank, alleging that the company had breached its fiduciary duty to ERISA plans that held American Depositary Receipts by overcharging retirement plans that invested in foreign securities.[122] In March 2017, the presiding judge declined to dismiss the suit. In December 2017, another lawsuit alleged that BNY Mellon manipulated foreign exchange rates was filed by Sheet Metal Workers' National Pension Fund.[123] BNY Mellon agreed to pay $12.5 million to settle the 2016 lawsuit in December 2018.[124]
Personal data breach[edit]
In February 2008, BNY Mellon suffered a security breach resulting in the loss of personal information when backup tapes containing the personal records of 4.5 million individuals went missing. Social security numbers and bank account information were included in the records. The breach was not reported to the authorities until May 2008, and letters were sent to those affects on May 22, 2008.[125][126]
In August 2008, the number of affected individuals was raised to 12.5 million, 8 million more than originally thought.[127][128]
IT system outages[edit]
On Saturday, August 22, 2015, BNY Mellon's SunGard accounting system broke down during a software change. This led to the bank being unable to calculate net asset value (NAV) for 1,200 mutual funds via automated computer system.[129] Between the breakdown and the eventual fix, the bank calculated the values using alternative means, such as manual operation staff. By Wednesday, August 26, the system was still not fully operational.[130] The system was finally operational to regular capacity the following week. As a result of a Massachusetts Securities Division investigation into the company's failure and lack of a backup plan, the company paid $3 million.[131]
In December 2016, another major technology issue caused BNY Mellon to be unable to process payments related to the SWIFT network. As of the time of the issue, the bank processed about 160,000 global payments daily, an average of $1.6 trillion.[132] The company was unable to process payments for a 19 hours, which led to a backlog of payments and an extension of Fedwire payment services.[132]
Privately owned public space agreement violation[edit]
According to a New York City Comptroller audit in April 2017, BNY Mellon was in violation of a privately owned public space (POPS) agreement for at least 15 years. In constructing the 101 Barclay Street building in Lower Manhattan, BNY Mellon had received a permit allowing modification of height and setback regulations in exchange for providing a lobby accessible to the general public 24 hours a day. Auditors and members of the public had been unable to access or assess the lobby for many years, and were actively prevented from doing so by BNY Mellon security.[133][134]
In September 2018, the company began to permit public access to a portion of the lobby.[135] However, BNY Mellon remains in violation of its agreement, as the lobby must be accessible to the public 24 hours a day.[136] As of early 2021 the city Comptroller reported that company security personnel prevented auditors from entering or photographing the lobby and was seeking to have the "public lobby" designation removed.[137]
Employment legal issues[edit]
BNY Mellon settled foreign bribery charges with the U.S. Securities and Exchange Commission (SEC) in August 2015 regarding its practice of providing internships to relatives of officials at a Middle Eastern investment fund.[138] The U.S. SEC found the firm in violation of the Foreign Corrupt Practices Act.[139] The case was settled for $14.8 million.[140]
In March 2019, BNY Mellon staff considered legal options after the company banned employees from working from home.[141] In particular, staff cited concerns regarding the impact on childcare, mental health, and diversity.[142] The company reverted the ban as a result of employee outcry.[143]
Other legal issues[edit]
In September 2009, BNY Mellon settled a lawsuit that had been filed against the Bank of New York by the Russian government in May 2007 for money laundering; the original suit claimed $22.5 billion in damages and was settled for $14 million.[144][145]
In 2011, South Carolina sued BNY Mellon for allegedly failing to adhere to the investment guidelines relating to the state's pension fund. The company settled with the state in June 2013 for $34 million.[146][147]
In July 2012, BNY Mellon settled a class action lawsuit relating to the collapse of Sigma Finance Corp. The suit alleged that the bank invested and lost cash collateral in medium-term notes. The company settled the lawsuit for $280 million.[148]
In December 2018, BNY Mellon agreed to pay nearly $54 million to settle charges of improper handling of "pre-released" American depositary receipts (ADRs) under investigation of the U.S. Securities and Exchange Commission (SEC). BNY Mellon did not admit or deny the investigation findings but agreed to pay disgorgement of more than $29.3 million, $4.2 million in prejudgment interest and a penalty of $20.5 million.[149][150]
Recognition and rankings[edit]
As of 2015, BNY Mellon was the world's largest custody bank,[151][152] the sixth-largest investment management firm in the world,[153] and the seventh-largest wealth management firm in the United States.[62] In 2018, BNY Mellon ranked 175 on the Fortune 500[154] and 250 on the Financial Times Global 500.[155] It was named one of world's 50 Safest Banks by Global Finance in 2013 and 2014,[156][157] and one of the 20 Most Valuable Banking Brands in 2014 by The Banker.[158] BNY Mellon was named on the Dow Jones Sustainability North America Index in 2013,[159] 2014 and 2015, and the World Index in 2014,[160] 2015[161] and 2016.[162]
The bank says it is the longest running bank in the United States,[163] a distinction sometimes disputed by its rivals and some historians.[7] The Bank of North America was chartered in 1781, and was absorbed by a series of other entities until it was acquired by Wells Fargo. Similarly, The Massachusetts Bank went through a series of acquisitions and ended up as part of Bank of America. The Bank of New York remained independent, absorbing other companies, until its merger with Mellon. BNY Mellon is at least the third-oldest bank in the US.[7]
Sponsorships[edit]
Since 2012, BNY Mellon has expanded its number of sponsorships.[164] BNY Mellon was the title sponsor of the Oxford and Cambridge Boat Race from 2012 to 2015.[164][165][166] The company also sponsors the Head of the Charles Regatta in Boston.[164] In 2013, the company became a 10-year sponsor of the San Francisco 49ers and a founding partner of Levi's Stadium.[167] The company is a regular sponsor of the Royal Academy of Arts in London.[168]