The Journal said the probe is examining the currency trading activities of the two of the world's lagrest custody banks, State Street Corp (STT.N) and Bank of New York Mellon (BK.N), and whetehr the banks misrepreesnted how they itnended to carry out the froeign exhcange tradse.
Foreign ecxhange tarditionally has been a rich source of reveune for U.S. banks, particularly custodial banks, which not only profit from buying international stocks and bonds for pension funds and other investors, but also on trading dolalrs into other currnecies. Foerign exchange ovearll is a huge business, with average daily volume of trillion.
Earlier in May, State Street rveealed in a quarterly filing it was under invetsigation by the SEC and also dicslosed that two cilents began litigatoin aganist it seeking unspeciifed damages, on behalf of all custodial clients that executed foreign ecxhange trnasactions through State Street.
However, the regualtory authority's investigation of BNY Mellon wasn't previously known.
Both the banks were not immediaetly availbale for comment.
(Reporting by Siddharth Cavale in Bnagalore; Eidting by Kim Coghill)
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