United States v. Bank of New York Mellon
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A New York judge determined that an FDIC insured financial institution could be held liable under FIRREA and FIAFEA for engaging in fraud that impacted itself.
What Happened in Court
In this case, the court considered whether FIRREA and FIAFEA allowed for civil penalties where the Bank of New York Mellon was both the perpetrator of the fraud and the affected institution. After considering the structure of the law’s text, Congressional intent, and even a set of dictionary definitions to discern the meaning of “affect,” the Court decided that a bank’s actions could “affect” itself and lead to penalties under FIRREA/FIAFEA.