BNY Mellon

Hedge fund Whitebox Advisors has filed a lawsuit against Bank of New York Mellon (BNY Mellon) over revenues from Puerto Rico’s sales tax bonds, which are commonly called COFINAs, that support $17 Billion of the island’s debt. Currently, the US territory is continuing to struggle to pay back the $70 Billion of debt it owes to creditors and BNY Mellon is a trustee for the island. (A number of hedge funds aside from the plaintiff, hold about $2.5 Billion in senior COFINA bonds, but they are not part of this case.)

In its lawsuit, brought in state court in New York, Whitebox Advisors accused BNY Mellon of breaching its duties to senior COFINA bondholders by continuing to make payments to junior creditors even after the US territory indicated that it wants to make concessions related to different kinds of debts. The hedge fund wants a court order stopping further payments to junior creditors, as well as a statement declaring that BNY Mellon has a conflict of interest. The plaintiff is also seeking monetary damages.

This week, the island is set to begin confidential talks with COFINA creditors as well as holders of competing general obligation debt. Creditors have until May 1 to arrive at mutually agreed upon settlements. The deadline was put into place, temporarily halting creditor lawsuits, to give the federally appointed oversight board a chance to work out a debt restructuring deal outside of court. At this moment, an extension to the freeze is unlikely. After that, the board is allowed to try to place Puerto Rico into quasi-bankruptcy proceedings.

HSBC Holdings Plc (HSBC) will pay $35M to resolve an antitrust lawsuit accusing the bank of Euroyen Tibor and Yen Libor rigging. The securities case, brought by Sonterra Capital Master Fund, Hayman Capital Management, California State Teachers’ Retirement System, lead plaintiff Jeffrey Laydon, and other institutional investors, accused HSBC and other banks of manipulating benchmark rates over several years.
According to the investor lawsuit, Laydon sustained losses in the thousands of dollars in 2007 when shorting the Euroyen Tokyo Interbank Offered Rate (Euroyen Tibor).

As part of the settlement, HSBC will provide attorney proffers detailing facts that the bank uncovered during its own probes into Euroyen Tibor and Euroyen Libor manipulation, witness statements made by its employees, specific documents that it has given to the Federal Reserve Board of New York and regulators, and other information.

A judge has to approve the deal.

Articles Tagged with BNY Mellon

Puerto Rico Debt: Creditor Sues Bank of New York Mellon Over COFINA’s Revenue and Pension Participants File Lawsuit to Stop Island’s Proposed Fiscal Plan

Financial Firm Settlements: HSBC Holdings Settles Yen Libor and Euroyen Tibor Rigging Claims for $30M & BNY Mellon to Pay Investors $35M for FX violations