AP1 wins securities-lending lawsuit against BNY Mellon
Swedish pensions buffer fund AP1 has won damages of up to $33.7m (€24.7m) in a UK court, after a judge ruled Bank of New York Mellon (BNYM) had been negligent in its handling of one of the fund’s mandates.
AP1 said it filed the lawsuit in London’s Commercial Court against BNYM as a result of securities-lending transactions carried out on the fund’s behalf.
The lawsuit referred to a sum of $33.7m, it said, which now corresponds to SEK219m.
Johan Magnusson, managing director at AP1, said: “It is very satisfying that the Commercial Court in London has found in our favour.”
He said the judge concluded that BNYM had been guilty of many violations and that AP1 had acted correctly.
“Our efforts to demand redress for the losses the bank has caused us – and therefore the Swedish pension system – have been successful,” Magnusson said.
The judge noted that BNYM had failed in its care in its handling of the fund’s mandate and had therefore been negligent.
BNYM was judged liable for damages, which would cover most of the loss incurred by the fund plus interest expenses, it said, but added the exact amount had not yet been set.
BNYM will also have to pay most of AP1’s legal costs for the trial.
However, AP1 conceded the ruling may be appealed by BNYM.
The pension fund said the damages and compensation for legal and interest costs would have a positive impact on its net investment income when the ruling went into force because the full amount of the original loss had been recognised in its 2008 accounts.
AP1 had SEK246bn in assets under management at the end of June.