New York Attorney General Eric Schneiderman is set to lead an inquiry into whether the Bank of New York Mellon Corp. committed fraud by improperly charging state and local pension funds for currency transactions over the past decade.

A whistleblower group alleges that BNY Mellon and State Street Corp. of Boston shortchanged public pension funds in Virginia, California, and Florida. The group includes Harry Markopolos, the Boston-area investor known for warning the SEC for years of Bernie Madoff’s ongoing Ponzi scheme. State officials in Virginia, Florida, Massachusetts, North Carolina, Ohio, Oklahoma, and California are currently conducting inquiries into the treatment of state and local pension funds.

Mr. Schneiderman has the advantage of a 1921 law called the Martin Act which, when used alongside the newly enhanced New York False Claims Act, could allow him to pursue a national lawsuit on behalf of pension funds. The inquiry would involve the new Taxpayer Protection Bureau, whose goal is to use the state False Claims Act to investigate fraudulent claims for state government money.

Read the entire article, “New York’s Top Cop Jumps Into Fray”