Bank of New York

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The Bank of New York
Former type Public
Industry Banking
Fate Merged (with Mellon Financial in 2007)
Founded New York City, NY (June 9, 1784 (1784-06-09))
Defunct 2007
Existed for : 223 years, 23 days
Headquarters New York City
Key people Alexander Hamilton, founder
Alexander McDougall, cofounder, first president
Isaac Roosevelt, cofounder, second president
Thomas Renyi, last chairman and CEO of The Bank of New York, instrumental in the bank's merger with Mellon Financial Corporation
Products Financial Services
Website bnymellon.com

The Bank of New York was a global financial services company established in 1784 by the American Founding Father Alexander Hamilton. It existed until its merger with the Mellon Financial Corporation on July 2, 2007.[1] The company now continues under the new name of The Bank of New York Mellon or BNY Mellon.

History[edit]

Bank of New York at 48 Wall St.

The Bank of New York was founded on June 9, 1784,[2] making it the oldest bank in the United States. Alexander Hamilton wrote the new bank's constitution, and became the individual most actively involved in the organization of The Bank of New York, guiding it through its early stages. The bank opened for business at the Walton House in Lower Manhattan only a few months after the departure of British troops from American soil. It opened with a capitalization of $500,000.[2] William Seton, future father-in-law of Saint Elizabeth Seton, was named director in 1786.[3]

To commemorate its 225th anniversary, BNY Mellon created a 5 part video series entitled "Looking Forward : The 225th Anniversary of The Bank of New York Mellon" which was narrated by historian Richard Brookhiser and recaps the company’s history from its founding in 1784. The segments are entitled:

Part 1 : New Beginnings[4] Part 2 : A Company of Visionaries[5] Part 3 : A Catalyst for Success[6] Part 4 : A Focus on Clients[7] Part 5 : A Commitment to Help[8]

Timeline[edit]

Older Bank of New York logo
  • 1966: The Bank acquired the Empire Trust Company.
  • 1968: The Bank formed its holding company, The Bank of New York Company, Inc.
  • 1982: Bruce Rappaport purchases a 7.5% stake in The Bank of New York [9]
  • 1988: The Bank of New York acquired the Irving Bank Corporation[10] and moved its headquarters to One Wall Street, now known as the Bank of New York Building.
  • 1990s: The Bank acquired the National Community Banks in New Jersey and the Putnam Trust Company in Connecticut.
  • 2003: The Bank of New York acquired Pershing LLC,[11] a provider of correspondent clearing and outsourcing services for broker dealers, asset managers. and financial intermediaries. That same year, the Bank integrated Lockwood Financial Services, Inc.[12] into Pershing, creating one of the largest providers of managed account programs with client assets totaling nearly US$18 billion.
  • Late 2005: The Bank of New York settled with federal regulators for US$38 million regarding a money laundering scandal that began in 1996. The illegal operation involved two Russian emigres—one who was a Vice President of the bank—moving over US$7 billion via hundreds of wires, and ended in the prosecution of at least nine individuals.
  • April 7, 2006: J.P. Morgan Chase & Co. announced they would swap their corporate trust unit for Bank of New York Co.'s retail and small business banking network. The swap valued the Bank of New York business at US$3.1 billion, and JPMorgan's trust unit at US$2.8 billion and gave Chase access to 338 additional branches and 700,000 new customers in the New York, New Jersey, and Connecticut Tri-State area.
  • December 4, 2006: The Bank of New York and Mellon Financial Corporation announced a merger, in which the name would be changed to The Bank of New York Mellon Corporation, or BNY Mellon, creating the world's largest securities servicing provider and a top asset management firm globally.
  • May 2007: Russia filed a US$22.5 billion lawsuit against the bank for money laundering.[13] The suit was subsequently settled for $14 million.[14]

Merger with Mellon[edit]

Madison Avenue branch

Talks of a merger began when Tom Renyi approached Robert Kelly about a possible amalgamation between the Bank of New York and Mellon Financial Corporation.[15] The US$16.5 billion deal was finalized on July 1, 2007, with Kelly as the Chief Executive Officer (CEO) of the new company, and Renyi as Executive Chairman.[15][16] Per the deal, the new Board of Directors is composed of ten directors appointed by the Bank of New York, and eight by Mellon.[17] The Bank of New York Mellon launched its new brand identity as on October 1, 2007.

Currency Trading Lawsuit[edit]

In October, 2011, the Justice Department and New York's attorney general filed civil lawsuits against the Bank of New York, alleging foreign currency fraud. The suits hold that the bank deceived pension-fund clients by manipulating the prices assigned to them for foreign currency transactions. Allegedly, the bank selected the day's lowest rates for currency sales and highest rates for purchases, appropriating the difference as corporate profit. The scheme is said to have generated $2 billion for the bank, at the expense of millions of Americans' retirement funds, and to have transpired over more than a decade. Purportedly, the bank would offer secret pricing deals to clients who raised concerns, in order to avoid discovery. Bank of New York has defended itself vigorously, maintaining the fraud accusations are "flat out wrong" and warning that as the bank employs 8,700 employees in New York, any damage to the bank would have negative repercussions for the state of New York. [18] [19]

See also[edit]

References[edit]

  1. ^ "The Bank of New York Mellon Profile". Google Finance. Retrieved 2007-08-06. 
  2. ^ a b Wolfe, Allis (1995). "Bank of New York". In Kenneth T. Jackson. The Encyclopedia of New York City. New Haven, CT & London & New York: Yale University Press & The New-York Historical Society. pp. 70–71. 
  3. ^ Barbery, Hélène. Elizabeth Seton et les commencements de l'Eglise catholique aux Etats Unis, 1868. p. 8.
  4. ^ bnymellon.com
  5. ^ bnymellon.com
  6. ^ bnymellon.com
  7. ^ bnymellon.com
  8. ^ bnymellon.com
  9. ^ Greenhouse, Steven (1988-02-04). "A Secret Emperor of Oil and Shipping". The New York Times. 
  10. ^ Quint, Michael (1988-10-08). "Irving Signs Merger Deal, Ending Fight". The New York Times. Retrieved 2010-03-31. 
  11. ^ "Pershing". Pershing LLC. Archived from the original on 19 December 2008. Retrieved 2009-01-07. 
  12. ^ "Lockwood". Lockwood. Retrieved 2009-01-07. 
  13. ^ "Russia sues Bank of New York for 22.5 bln usd". Forbes.com. May 17, 2007. Archived from the original on 2 December 2008. Retrieved 2009-01-07. [dead link]
  14. ^ Parloff, Roger (September 22, 2009). "Russia settles suit against U.S. bank for a pittance". cnn.com. Retrieved 2011-05-27. 
  15. ^ a b Dash, Eric (2006-12-05). "Bank of New York and Mellon Will Merge". New York Times. Retrieved 2007-08-08. 
  16. ^ "InformationWeek 500: Magnificent Seven". Information Week. Retrieved 2007-09-21. 
  17. ^ "Bank Of New York To Merge With Mellon". CBS News. 2006-12-04. Retrieved 2007-08-08. 
  18. ^ Mollenkamp, Carrick (2011-10-05). "US and New York Sue BNY Mellon". The Wall Street Journal. Retrieved 2011-10-08. 
  19. ^ "King World News Interview: Barry Markopolos". Retrieved 2011-10-08. 

External links[edit]