BNY mellon

---- ------ ----- ----- --------

""'JS 44 (Rev. 12/07) CIVIL COVER SHEET The JS 44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service ofpleadings or other papers as required by law, except as provided by local rules ofcourt. This form, approved by the Judicial Conference ofthe United States in September 1974, is required for the use of the Clerk ofCourt for the purpose of Initiating the civil docket sheet. (SEE INSTRUCTIONS ON THE REVERSE OF THE FORM.)

I. (a) PLAINTIFFS

Southeastern Pennsylvania Transportation Authority, on behalf of itself

and all others similarly situated

(b) County of Residence of First Listed Plaintiff Philadelphia

(EXCEPT IN U.S. PLAINTIFF CASES)

(c) Attorney's (Finn Name, Address, and Telephone Number)

Barroway Topaz Kessler Meltzer & Check, LLP 280 King of Prussia Road, Radnor, PA 19087 610 667-7706

DEFENDANTS

Bank of New York Mellon Corporation

County of Residence of First Listed Defendant _N_e_w_Y_o_rk _

(IN U.S. PLAINTIFF CASES ONLY)

NOTE: IN LAND CONDEMNATION CASES, USE THE LOCATION OF THE

LAND INVOLVED.

Attorneys (If Known)

II. BASIS OF JURISDICTION (Place an "X" in One Box Only) III. CITIZENSHIP OF PRINCIPAL P ARTIES(Place an "X" in One Box for Plaintiff (For Diversity Cases Only) and One Box for Defendant)

o I U.S. Govemment o 3 Federal Question PTF DEF PTF DEF Plaintiff (U.S. Government Not a Party) Citizen of This State ~ 1 0 I Incorporated or Principal Place l!!l 4 0 4

of Business In This State

o 2 U.S. Govemment a 4 Diversity Citizen of Another State o 2 a 2 Incorporated and Principal Place o 5 l!'I 5 Defendant

(Indicate Citizenship of Parties in Item Ill) of Business In Another State

Citizen or Subject of a o 3 o 3 Foreign Nation o 6 0 6 Forei n Count

IV NATURE OF SUIT (Place an "X" in One Box Onlv)

OTHER STATUTESCONTRACT T'.0R!fS KOR'FEll'IJRElBEliIlJmIY 'BN11111ilUJP:rCY

o II0 Insurance o 120 Marine o 130 Miller Act o 140 Negotiable Instrument o 150 Recovery of Overpayment

0 0

0

PERSONAL INJURY PERSONAL INJURY 310 Airplane 0 362 Personal Injury315 Airplane Product Med. Malpractice

Liability 0 365 Personal Injury 320 Assault, Libel & Product Liability

o 610 Agriculture o 620 Other Food & Drug o 625 Drug Related Seizure

of Property 21 USC 881 o 630 Liquor Laws

o 422 Appeal 28 USC 158 o 423 Withdrawal

28 USC 157

~ll.rWERTv RJ :I-ITS & Enforcement ofJudgment

o 151 Medicare Act o 152 Recovery of Defaulted

Student Loans (Excl. Veterans)

0

0 0

Slander 0 368 Asbestos Personal 330 Federal Employers' Injury Product

Liability Liability 340 Marine PERSONAL PROPERTY 345 Marine Product 0 370 Other Fraud

o 640 R.R. & Truck o 650 Airline Regs. o 660 Occupational

SafetylHealth 0690 Other

o 820 Copyrights o 830 Patent o 840 Trademark

o 153 Recovery of Overpayment Liability 0 371 Truth in Lending ,ABOR SOCIA .sE ORl fV

of Veteran's Benefits o 160 Stockholders' Suits o 190 Other Contract o 195 Contract Product Liability o 196 Franchise

0 0

0

350 Motor Vehicle 0 380 Other Personal 355 Motor Vehicle Property Damage

Product Liability 0 385 Property Damage 360 Other Personal Product Liability

Iniury

o 710 Fair Labor Standards Act

o 720 LaborlMgmt. Relations o 730 Labor/Mgmt.Reporting

& Disclosure Act

o 861 HIA (1395fl) o 862 Black Lung (923) o 863 DIWC/DIWW (405(g)) o 864 ssm Title XVI o 865 RSI (405(g»

I REAL PROPERTY CIVIL RIGHTS PRISONER PETITIONS o 740 Railway Labor Act FEDERAL TAX SUlTS o 210 Land Condemnation o 220 Foreclosure o 230 Rent Lease & Ejectment o 240 Torts to Land

0 0 0

441 Voting 442 Employment 443 Housing!

Accommodations

0 510 Motions to Vacate Sentence

Habeas Corpus: 0 530 General

o 790 Other Labor Litigation o 791 Empl. Ret. Inc.

Security Act

o 870 Taxes (U.S. Plaintiff or Defendant)

o 87 I IRS-Third Party 26 USC 7609

o 245 Tort Product Liability 0 444 Welfare 0 535 Death Penalty IMM1GRATION o 290 All Other Real Property 0

0

0

445 Amer. wlDisabilities Employment

446 Amer. wlDisabilities • Other

440 Other Civil Rights

0 540 Mandamus & Other 0 550 Civil Rights 0 555 Prison Condition

o 462 Naturalization Application o 463 Habeas Corpus

Alien Detainee o 465 Other Immigration

Actions

0 400 State Reapportionment 0 410 Antitrust 0 430 Banks and Banking 0 450 Commerce 0 460 Deportation 0 470 Racketeer Influenced and

Corrupt Organizations 0 480 Consumer Credit 0 490 CablelSat TV 0 810 Selective Service 0 850 Securities/Commoditiesl

Exchange 0 875 Customer Challenge

12 USC 3410 III 890 Other Statutory Actions 0 891 Agricultural Acts 0 892 Economic Stabilization Act 0 893 Environmental Matters 0 894 Energy Allocation Act 0 895 Freedom ofInformation

Act 0 900Appeal of Fee Determination

Under Equal Access to Justice

0 950 Constitutionality of State Statutes

V. ORIGIN Appeal to District(Place an "X" in One Box Only) Judge from

~ 1 Original o 2 Removed from 0 3 Remanded from o 4 Reinstated or 0 5 Transferred from 0 6 Multidistrict o 7 Proceeding State Court Appellate Court Reopened another dlstnct Litigation Magistrate

s eel Jud ment

Cite the U.S. Civil Statute under which you are filing (Do not cite jurisdictional statutes unless diversity): VI. CAUSE OF ACTION b28~U~.:-S,_C~,§~1_3_32-7{d-,-)_an_d_2_8_U_,S_,C_'.;;,§_13_9_1{:...b):.;,(l-,-)_an_d_{:..,:2) _

Brief description of cause:

VII. REQUESTED IN ~ CHECK IF THIS IS A CLASS ACTION DEMAND $ To be determined at CHECK YES only if demanded in complaint:

COMPLAINT: UNDER F.RC.P. 23 trial, but not less than $5 million. JURY DEMAND: Ilf Yes 0 No

VIII. RELATED CASE(S) (See instructions):

IF ANY JUDGE DOCKET NUMBER

DATE

March 7,2011

FOR OFFICE USE ONLY

RECEIPT # AMOUNT APPL YING IFP JUDGE MAG. JUDGE

Case 2:11-cv-01628-TON Document 1 Filed 03/07/11 Page 1 of 16

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

SOUTHEASTERN PENNSYLVANIA TRANSPORTATION AUTHORITY, individually and on behalf of all others similarly situated,

Plaintiffs,

v.

THE BANK OF NEW YORK MELLON CORPORATION,

Defendant.

CIVIL ACTION NO.

CLASS ACTION COMPLAINT

JURY TRIAL DEMANDED

Plail1tiff Southeastern Pennsylvania Transportation Authority ("SEPTA"), individually

and on behalf of all other persons similarly situated, by its undersigned attorneys, alleges the

following against Defendant The Bank of New York Mellon Corporation ("BNY Mellon" or the

"Company") based upon informatiol1 and belief al1d the investigation of counsel, except as to the

allegations pertaining specifically to Plaintiff that are based on personal knowledge. SEPTA

incorporates by referel1ce the allegatiol1s set forth in the operative complaints filed in

Commonwealth of Virginia, ex reI. FX Analytics v. The Bank ofNew York Mellon Corp., No.

CL-2009-15377 (Va. Cir. ll11sealed Jan. 21, 2011) (the "Virginia Action") and State ofFlorida,

ex reI. FXAnalytics v. the Bank ofNew York Mellon Corp., No. 2009-ca-4140 (Fla. Cir. unsealed

Feb. 7, 2011) (the "Florida Action").

1


I. INTRODUCTION

1. BNY Mellon through its headquarters in New York, New York, serves as the

custodian for a number of institutiol1S in the United States. The Company t011tS itself as "the

world's largest global custodian" and has over $24 trillion in assets under custody.

2. As a custodian, BNY Mellon is respol1sible for, inter alia, executing-through its

FX Desk-foreign currency exchange ("FX") transactions l1ecessary to facilitate a client's

pl1rchases or sales of foreign securities or assets, the repatriation of foreign funds, or the

execution of currency hedging transactions.

3. As detailed in the Florida and Virginia Actions, from at least 2000, and

continuing through the present day, BNY Mellon has manipulated FX transactions executed by

the Company in order to maximize profits to BNY Mellon at the expense of the Company's

clients, such as SEPTA.

4. In essence, BNY Mellon charges its clients (1) inflated FX rates when buying

foreign currency, and (2) deflated FX rates when selling foreign currency. The rate BNY Mellon

actually charges clients is set after a FX transaction is executed and after the Company has an

opportunity to observe post-execlltion changes in the FX currency market. The difference

between the actual FX transaction price and the amount ultimately charged to BNY Mellon's

clients is pocketed by the Conlpany as profit.

5. BNY Mellon's practices remained unknown to Plaintiff and the Class llntil the

Florida and Virginia Actions were 11nsealed because, inter alia, the account statements provided

to BNY Mellon's clients failed to provide pertinent details including time stamps for each FX

transaction. Without FX time stamps, clients were 1111able to verify that the FX rates charged by

BNY Mellon were COl1sistent with the actual FX rates at the time the FX transactions were

2


executed. Moreover, according to the Florida Action, in order to avoid detection of its conduct

the Company provided its clients aCCOllllt statenlellts that showed FX rates that fell within the

daily trading range. BNY Mellon also used employees located in New York and Pittsbllrgh to

hold "reconciliation" calls to "choose foreign exchange rates, i.e., the Falsified FX Rates, of the

false price to cllarge" the Company's clients.

6. BNY Mellon's actions have generated hundreds of millions of dollars annually in

unwarrallted profits - wrongly taken from BNY Mellon's clients - and may account for nlore

than one-half ofBNY Mellon's entire annual FX trading profits.

7. SEPTA brings this suit as a class action on behalf of all similarly affected clients

of BNY Mellon (the "Class"). The Class excludes those government pension funds that are

covered by independent qui tam actions that have been unsealed, or that become unsealed during

the pendency of this action. This action seeks to recover proceeds unlawfully obtained through

BNY Mellon's unfair FX trading practices as well as an order providing injunctive relief.

II. JURISDICTION AND VENUE

8. This Court has subject matter jurisdiction over this action pursuallt to the Class

Action Fairness Act of 2005 ("CAFA"), 28 U.S.C. § 1332(d), because this is a class action in

which: (1) there are hundreds (if not thousands) of proposed Class members; (2) many class

members of the proposed Class are citizens of States other than that of the Defendant; and (3) the

claims of the proposed Class members exceed $5,000,000 ill the aggregate.

9. Venue in this judicial District is proper under 28 U.S.C. § 1391(b)(I) and (2). A

substantial part of the events or omissions giving rise to the claims occurred within this District.

Defendant transacts busilless in this District and maintains substantial operations within the

Commonwealth of Pennsylvania.

3


III. PARTIES

10. SEPTA is a regional public transportation authority servIng Bucks, Chester,

Delaware, Montgomery, and Philadelphia COllnties. SEPTA's principal offices are located in

Philadelphia, PA. SEPTA retained BNY Mellon to provide custodian services for the benefit of

SEPTA's employee pension benefit plans. Dllring the relevant time period, BNY Mellon

execllted hundreds ofFX transactions on SEPTA's behalf.

11. Defendant BNY Mellon is a Delaware corporation headquartered ill New York.

BNY Mellon mailltains its principal place of business at One Wall Street, New York, NY 10286.

The Company has several offices in the Commonwealth of Pemlsylvania.

12. BNY Mellon is a global financial services company that provides various

financial services for institutions, corporations, and higll-net-worth illdividuals. Additionally,

BNY Mellon provides custodial and FX services-through its FX Desk-to SEPTA and the

Class.

13. BNY Mellon's agreement with SEPTA ackIl0wledges that BNY Mellon is a

fiduciary of SEPTA. The agreemellt also provides BNY Mellon with all powers necessary for

the protection of SEPTA's assets.

IV. BNY MELLON'S FX TRANSACTION PRACTICES

14. BNY Mellon holds itself out on its website as the "world's largest global

custodian" and represents that it 11as in excess of $20 trillion in assets under custody.

15. One ofBNY Mellon's primary business lines provides custodian banking services

for a nllmber of clients across the world. A function of its custodian services includes execution

of transactions in securities traded olltside of the United States. Execllting such trades requires

4


BNY Mellon to covert U.S. dollars ("USD") into a foreign currency and vice versa when the

funds are being returned to the United States.

16. According to BNY Mellon's third quarter 2010 Form 10-Q, as of Septen1ber 30,

2010, BNY Mellon had generated $628 million in "foreign exchange and other trading revenue"

year-to-date. Additionally, BNY Mellon's 2009 Annual Report on Form 10-K indicates that

BNY Mellol1 generated $1.04 billion and $1.46 billion in foreign exchange and other trading

revenue in 2009 and 2008, respectively.

17. BNY Mellon's website touts the Company's experIence, expertise, and

performance of its FX Desk al1d represents that it is "a highly capable provider for foreign

exchange sales, trading, e-commerce, and research services."

18. BNY Mellon's FX transactions on behalf of its clients were initiated both directly

and indirectly. In direct FX transactions, clients or third party investment managers

communicate trade requests to a BNY representative, who quotes a rate that the client or third

party investment manager can either accept or reject. If the rate is accepted, the FX transaction

is executed at the agreed upon price. In indirect FX transactions, when a trade requires the

purchase of foreign currency to fund a transaction, or when foreign currency needs to be

cOl1verted back to USD, BNY Mellon executes the FX transactions on the client's behalf. The

indirect method involves the custodian, rather tl1an the client, overseeing the trade process from

start to con1pletion. The client has little or no input in the FX transaction at any point in the

process.

19. The FX transactions affected by BNY Mellon's actions described herein were

indirect FX transactions. Indirect FX transactions are also known as "standing instruction"

and/or "non-11egotiated" trades.

5


20. Upon information and belief, until October 2009, BNY Mellon described indirect

FX trades as being "free of charge" and assured clients that such transactions were subject to

"best execution" standards-which reqllire BNY Mellon to obtain the best price for its clients.

BNY Mellon's representations were false.

v. BNY MELLON MANIPULATES FX TRADES

21. According to the complaints filed in the Virginia and Florida Actions, when BNY

Mellon received instructions to execute a foreign trade, it would convert funds from USD into a

foreign currency to complete the transaction. See} e.g., Virginia, Compi. ~62. After the trade

was executed, "[BNY Mellon] would note the low and high exchange rate of the day for the two

currencies involved in the FX trade." Id. ~63.

22. At the end of the trading day, BNY Mellon sinlply "ignored the price [it] paid for

the FX [conversiol1]" and charged its clients for the "FX transaction as if the trade occurred at

either the high or low of the day (depending on the nature of the transaction, buy or sell), in order

to charge [its clients] the least favorable rate tllat occurred that trading day." Id. ~64.

23. Accordingly, when clients where "buying" a foreign Cllrrency, BNY Mellon

would buy the currency at one rate but charge the clients a higher rate. See ide ~66. For "sales"

of FX currencies, BNY Mellon charged clients a lower conversion rate-retllming less ,currency

to its clients. Id ~69.

24. In either scenario, BNY Mellon simply pocketed the difference between the price

it paid for the currency and the amount debited or credited to clients' accounts.

25. The Wall Street Journal provided the following summary of how BNY converted

funds and then manipulated FX prices for a trade on behalf of one Virgil1ia pension fund:!

Carrick Mollenkamp, Lingling Wei, and Gregory Zuckennan, "Suit Alleges Mellon Created Fake Trades, Overcharged," The Wall Street Journal (Feb. 4, 2011).

6


1 f . - 2 ... '" , ,- ': . "'.

Virginia Bank of New York Mellon pension fund re<eives instruction and Mellon fund, instead of Mellon negotlJted ne-eds to sells $]25 million of gets getting ($13.5 profits trade. BNY convert $125 pension fund money and tSl),5 million. re<:eives ($141.250 Mellon profit mltion Into buys. CanadIan dollars in million. C513.35 million at would hJve C<lnadian interbank market at 10682. the lowest , been about dollars, USD/CAD conversion rate mtc of the day. C$6.250.

of 1.0795.

BNY Virginia pension BNY Ina

Cu en r Bank of New York Mellonallegedlypfofited by carrying out atrade for a pension fund client giving thClnthe worst rate of the day. whilepockeUog the difference between that rilte and the rate they :lttua1ty got.

26. Upon information and belief, Plaintiff alleges that the foregoing illustration is

consistent with the manner in which BNY Mellon executed trades for all Class members.

27. BNY Mellon's manipulation ofFX rates was a companywide operation that "used

a foreign-exchange system called 'Charlie' to create fake trades and overcharge [its clients].,,2

Upon information and belief, the scheme also required coordination between BNY Mellon's

trading desks in Pittsburgh and New York in order to avoid detection. See Florida, Compi.

~~45-61.

28. SEPTA's holdings include international assets that require FX transactions in

connection with the purchase and sale of securities. At no time has SEPTA authorized BNY

Mellon to charge SEPTA the false FX rates as alleged herein.

VI. BNY MELLON ACTIVELY CONCEALED ITS CONDUCT

29. In order to conceal its actions and avoid detection, BNY Mellon's account

statements to its clients reported FX conversion rates that fell within the high and low range for

each day's FX rates. BNY Mellon's account statements also failed to provide time stamped

ld.

7


execLItion prices. The combination effectively precluded cliel1ts from discovering that the FX

rates they were being charged were maniplLlated by BNY Mellon.

30. BNY Mellon is in sole possessiol1 of records accurately detailing the manipulated

FX transactions and the FX rates actually incurred by BNY Mellol1 whel1 executing the FX

transactions for its clients.

31. SEPTA's account statements from BNY Mellon did not provide it with time

stamped FX trades. Because the account statements provided to SEPTA by BNY Mellon also

indicated FX rates that were within the daily range of FX rates, SEPTA was llnable to discover

BNY Mellon's conduct prior to the Florida and Virginia Actions becoming unsealed.

32. SEPTA was not aware, and BNY Mellon did not disclose, that the costs of the

reported FX transactions executed by BNY Mellol1 were not the actual FX costs incurred by

BNYMellon.

33. SEPTA was not aware, and BNY Mellon did not disclose, that BNY Mellon

would retain the difference between the actual FX rates and the less favorable manipulated FX

rates cl1arged to SEPTA by BNY Mellon.

34. SEPTA was not aware, and BNY Mellon did 110t disclose, that BNY Mellon

would take hidden fees or profits from the FX transactions they executed, including mark-ups or

mark-downs, when execlIting FX trades on SEPTA's behalf.

35. Pursuant to its agreement with SEPTA, BNY Mellon was not authorized to

manipulate FX transactions in the manner described 11erein.

36. BNY Mellon's practices affected all of BNY Mellon clients wl10se FX

transactions were indirectly executed by BNY Mellol1 during the relevant time period.

8


VII. CLASS ACTION ALLEGATIONS

37. This action is brought and may properly be maintained as a class action pursuant

to Rules 23(a), 23(b)(1), 23(b)(2) and/or 23(b)(3) of the Federal Rules of Civil Procedure.

38. This suit is a class action brought on behalf of a Class of all public and private

pension fllnds, and any other trusts or funds for whom BNY Mellon served as the custodial bank

and executed FX transactions on an "indirect" or "custody" basis and which have suffered

damages as a result of tIle conduct alleged herei1l. The Class excludes any government pension

fund that is covered by independent qui tam actions that have been unsealed, or tllat become

unsealed during the pendency of this actio1l. This action is brought pursuant to Rule 23(b)(2) for

injunctive or declaratory relief, and Rule 23(b)(3) for money damages.

39. Also excluded from the Class are Defendant, any entity in which Defendant has a

controlling interest, a11d the officers, directors, affiliates, legal representatives, heirs, successors,

subsidiaries, and/or assigns of any such individual or entity.

40. The members of the Class are so numerous that joinder of all members

individually, in one action or otherwise, is impracticable.

41. There are questions of law and fact common to Plaintiff and the Class, including:

(a) Whether Defendants owed fiduciary duties to its clie1lts;

(b) Whether Defendant charged its clients incorrect FX rates and

improperly retained the margin between the actual and cllarged FX

rates;

(c) Whether Defendant provided account statements to its clients

that reported incorrect FX rates;

9


(d) Whether Plaintiff and the Class suffered monetary damages as

a result of the Defendant's actions and if so, what is the proper

measure of those damages

(e) Whether the Class entitled to injunctive relief.

42. Plaintiff s claims are typical of the clainls of the members of the Class and it is a

member of the Class described herein.

43. SEPTA is willing and prepared to serve tIle proposed Class in a representative

capacity witll all of the obligations and duties material thereto. Plaintiff will fairly and

adequately protect the interests of the Class alld has 110 interests adverse to or which directly and

irrevocably conflict with the interests of other members of the class.

44. SEPTA's interests are co-extellsive with, and not antagonistic to, those of the

absent Class members. SEPTA will ul1dertake to represent and protect the interests of absent

Class members.

45. SEPTA has engaged the serVIces of the lUldersigned counsel. Counsel is

experienced in complex class action litigation, will adequately prosecute this action, and will

assert and protect the rights of, and otherwise represel1t, the named Plaintiff and absent Class

n1embers.

46. The questions of law and fact common to the Class, as summarized above,

predonlinate over any questions affecting only individual members, in satisfaction of Rule

23(b)(3), and each such common question warrants class certification under Rule 23(c)(4).

47. A class action is superior to other available methods for the adjudication of this

controversy. Individualized litigation increases the delay and expense to all parties and the court

system given the complex legal alld factual issues of the case, and judicial determination of the

10


common legal and factual issues essential to this case would be far more fair, efficient, and

economical as a class action maintained in this forum thal1 in piecemeal individual

determinations.

48. Plaintiffknows of no difficulty tllat will be encountered in the management of this

litigation that would preclude its maintenal1ce as a class action. Compared to individualized

actions, the class action device presents far fewer management difficulties, and provides the

benefits of single adjudication, economy of scale, al1d comprehensive supervision by a single

court.

49. Defendant 11as acted or refused to act on grounds generally applicable to the

Class, tllereby making appropriate final and injllnctive reliefwitll respect to the Class.

50. In the alternative, the above-referel1ced Class may be certified under Rule

23(b)(I) because:

(a) The prosecution of separate actions by the individual Class

members would create a risk of inconsistent or varyil1g

adjudication with respect to individual Class nlembers' clainls and

would establish inconlpatible standards of conduct for Defendant;

or

(b) The prosecution of separate actions by individual members of

the Class would create a risk of adjudications which would as a

practical matter, be dispositive of the interests of other members of

the class who are not parties to the adjudications, or which would

substantially impair or impede the ability of other Class members

to protect their interests.

11


VIII. CLAIMS FOR RELIEF

COUNT I BREACH OF FIDUCIARY DUTY

51. Plaintiff restates and incorporates the allegations contained in each paragraph

above as though fully set forth herein.

52. Defendant had substal1tial discretion and control over Plaintiffs and the Class's

assets and FX transactions.

53. This discretion and control gave rise to a fiduciary duty and duty of care on the

part of Defendant to Plaintiff and the Class.

a. Defendant occupied a superior position over Plaintiff and

the Class with respect to the execution of FX transactions, and had

superior access to confidential information about prevailing market

FX rates at the time FX transactions were actually executed.

b. Defendant's superior position necessitated that Plaintiff and

the Class repose their trust and confidence in Defendant to fulfill

its duties and properly execute FX transactions at the prevailing

market rate at the time of the transaction, and Plaintiff and the

Class did so place their trust and cOl1fidence in Defendal1t by

execllting FX transactions through Defendant.

c. Defendant held itself out as a provider of superior custodial

and FX trading services, and evinced an understanding that it was a

fiduciary of Plaintiff and the Class. Plaintiff and the Class

reasonably and foreseeably relied upon such representations, and

12


trusted in Defendant's purported skill, expertise, and experience by

executing FX transactions through Defendallt.

54. As a fiduciary, Defelldant was required to discharge its obligations with respect to

Plaintiff and the Class (a) solely in the interest of Plailltiff and the Class, (b) for the exclusive

pllrpose of providing benefits to Plaintiff and the Class, (c) with the care, skill, prudence, and

diligence under the circumstances then prevailing that a prudent perSOll acting in a like capacity

and familiar with SUCll matters would use in the conduct of an enterprise of a like character and

with like aims, and (d) in accordance with the applicable documents and illstruments.

55. Defendant breached its fiduciary duties to Plaintiff and the Class by failing to

properly execute FX transactions, charging false FX rates, alld pocketing the difference between

the actual FX rates incurred by the Defendants and the false FX rates charged to Plaintiff and the

Class.

56. Plaintiff and the Class have been damaged as a direct and proximate result of

these breaches of fiduciary duty and are entitled to damages, and appropriate equitable relief,

illcluding accounting and imposition of a constructive trust.

COUNT II UNJUST ENRICHMENT

57. Plaintiff restates and incorporates the allegations contained in each paragraph

above as though fully set forth herein.

58. Defendant benefitted from its unlawful acts, omISSIons and breaches of its

fiduciary duties to Plailltiff and the Class as detailed herein. These unlawful acts, onlissions and

fiduciary breaches caused Plaintiff alld the Class to suffer injury and monetary loss.

59. As a result of the foregoing, it is unjust and inequitable for Defendant to have

enriched itself through the mallipulation of FX trallsactions as described herein.

13


60. Equity and good conscience require that Defendant disgorge all SUCll lUljUSt gains

and that Defendant should pay tIle amounts by whicll it was unjustly enriched to Plaintiff and the

Class in all amount to be determined at trial.

61. Plaintiff and the Class seek restitution from Defendant, and seek an order of this

Court disgorging all profits, benefits, and other such compensation obtained by Defendant

through its wrongful conduct and fiduciary breaches.

62. Plaintiff and tIle Class are entitled to the establishment of a constructive trust

impressed upon the benefits derived by Defendant fronl its unjust enrichment and inequitable

conduct.

IX. PRAYER FOR RELIEF

WHEREFORE, Plaintiff requests the following:

a) Certification of this action as a class action, proper and maintainable pursuant to

Rule 23 of the Federal Rules of Civil Procedure and declaration of the proposed

named Plaintiff as proper Class representative;

b) Such preliminary and permanent equitable relief, includillg imposition of a

constructive trust, as is appropriate to preserve the assets wrongfully taken from

Plaintiff and the Class;

c) Compensatory, consequential, and general damages In an amount to be

determined at trial;

d) Disgorgement and restitution of all earnings, profits, compensation, and benefits

received by Defendant as a result of its 1111lawful acts, omissions, and practices;

14


e) Punitive damages for each claim to the maximum extent available under the law

on aCCOl111t of the olltrageous nature of Defendant's willful and wanton disregard

for the rights of the Plaintiff and the Class;

t) Costs and disbursenlents of the action;

g) Pre- and post-judgment interest;

h) Reasonable attorneys' fees; and

i) Such other and further relief as this Court may deem just and proper.

x. JURY TRIAL DEMANDED

Plaintiff hereby demands a jury trial.

Dated: March 7, 2011 Respectfully submitted,

BARROWAY TOPAZ KESSLER MELTZER & CHECK, LLP

J H. Meltzer ean M. Handler

Darren J. Check Nallmon A. Amjed Ryan T. Degnan 280 King of Prussia Road Radnor, PA 19087 Tel: (610) 667-7706 Fax: (610) 667-7056 Lead Counsel for PlaintiffSoutheastern Pennsylvania Transportation Authority

NIX PATTERSON & ROACH, LLP Jeffery J. Angelovich Bradley E. Beckworth Brad Seidel 205 Linda Drive Daingerfield, TX 75638 Tel: (903) 645-7333 Fax: (903) 645-5389 Additional Counsel

15
