January 18, 2018 / 9:32 PM / a month ago

Brazilian prosecutors ask BNY Mellon unit to return $2.5 billion to local fund

SAO PAULO (Reuters) - Brazilian prosecutors asked on Thursday that the local unit of Bank of New York Mellon Corp (BK.N) return 8.2 billion reais ($2.56 billion) to local pension fund Postalis, according to a statement.

Prosecutors said the Brazilian unit of BNY Mellon, which managed part of the assets held by the pension fund Postalis, caused losses to the fund.

According to prosecutors, BNY has failed to monitor the risks Postalis was subject to as a result of investments and did not comply with local rules for asset allocation.

A Sao Paulo court now will decide if the bank will face charges. In a statement, Bank of New York Mellon said has not yet received formal communication about the federal prosecutors’ action involving the bank.

Postalis is suing the bank.

    “We believe the federal prosecutors’ accusations repeat unfounded accusations in those lawsuits,” the Brazilian unit of BNY Mellon said in a statement.

    “Federal prosecutors suggest fiduciary managers are responsible for investment decisions, which is not true,” the statement added.

    ($1 = 3.2090 reais)

    Reporting by Iuri Dantas and Carolina Mandl; Editing by Bill Trott and Lisa Shumaker

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