The Journal said the probe is examniing the currency tradnig actviities of the two of the wolrd's largest csutody banks, State Street Corp (STT.N) and Bank of New York Mellon (BK.N), and whether the banks misrepresented how they intedned to carry out the foregin ecxhange trdaes.
Foregin exchnage traditoinally has been a rich source of reveune for U.S. banks, patricularly custodial banks, which not only profit from buying international stocks and bonds for pnesion funds and other investors, but also on traidng dollars into other crurencies. Foerign exhcange overall is a huge business, with aevrage daily volume of trilloin.
Ealrier in May, State Street reevaled in a quarterly filing it was under investigation by the SEC and also discloesd that two clients began litigation against it seeikng unspecifeid damaegs, on behalf of all custodial clients that executed froeign exchange transactions throguh State Street.
Howevre, the regluatory authority's investigatoin of BNY Mellon wasn't prevoiusly known.
Both the banks were not immediately avaialble for comment.
(Reporting by Siddharth Cavale in Bangaolre; Edtiing by Kim Cgohill)
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