The Bank of New York Mellon Corp.(NYSE:BK) is paying over US$700 million to settle claims against the firm in connection with its foreign exchange (FX) pricing practices.

BNY Mellon announced that it has reached a series of settlement agreements with various U.S. agencies, including the U.S. Department of Justice (DOJ), the New York Attorney General, the U.S. Department of Labor, and the U.S. Securities and Exchange Commission (SEC), along with private class actions, that will fully resolve lawsuits and enforcement proceedings brought against the bank in relation to certain FX services that it provided to custody clients up until 2012.

The company has agreed to pay a total of US$714 million to resolve these cases, subject to court approval. Almost half of that total, US$335 million, will go to settle class action litigation. The DOJ and New York’s attorney general will each receive US$167.5 million, the SEC will get US$30 million, and the Department of Labor will receive US$14 million. The bank says that the total settlement amount is fully covered by its pre-existing legal reserves.

As part of the proposed settlement, the DOJ says that the bank also admitted that it rather than providing the “best rates” and “best execution”, as promised, it actually gave clients the worst reported interbank rates of the trading day. As part of the deal, the bank also has to terminate certain executives, and must reform its practices further to improve and increase the information provided to customers.

“We are pleased to put these legacy FX matters behind us, which is in the best interest of our company and our constituents. We continue to improve our product offerings to ensure they are meeting client demand and positioning clients to succeed in an increasingly complex financial environment,” the company said in a statement.

“The Bank of New York Mellon’s custody clients, many of whom are public pension funds and non-profit organizations, trusted the bank to be honest about the financial services it was providing and to deal with them fairly. BNYM and its executives, motivated by outsized profits and bonuses, breached this trust and repeatedly misled clients to believe that the pricing they were getting on foreign exchange was far better than it actually was,” said U.S. attorney, Preet Bharara.

“The bank, after three years of litigation, has finally admitted what was always clear from the evidence – contrary to its various representations, including a claim of ‘best rates,’ the bank in fact gave clients prices at or near the worst interbank rates reported during the trading day. The bank repeatedly deceived its customers and is paying a heavy penalty for it,” he added. “We will not hesitate to pursue and punish financial institutions and their executives who exploit their customer base to improve their bottom lines.”