Dear Mr. Berko:

Dear P.R.:

The original Bank of New York Mellon Corp. (BK-$21.51) was founded in 1784 by Alexander Hamilton, one of America’s most successful financial crooks and someone whom Thomas Jefferson would have wanted to put in jail. Hamilton later became secretary of the treasury in President George Washington’s administration, and Jefferson became secretary of state.

Today, 230 years and a few name changes later, BK has locations in more than 100 markets, claims 49,216 employees, boasts more than $26 trillion under custody and administration and might still be run by a bunch of crooks. Recently, the states of Florida, Virginia and New York filed lawsuits seeking well over a billion dollars in damages and penalties and accused Bank of New York Mellon of overcharging those states’ pension funds on foreign currency transactions.

It’s a walk in the park to shave a few tenths of a cent from the buy side and sell side of any currency transaction. When multiple transactions involve hundreds of billions of dollars, those teeny tenths turn into huge multimillion-dollar bonanzas.

This might be the tip of the iceberg for BK, as well as J.P. Morgan, Bank of America, Citigroup, Goldman Sachs and other huge money center banks, all of which have abused their trust over the public purse.

Now, P.R., I can’t recommend BK or any of the other big banks, most of which I believe are as crooked as a row of bad teeth. Your request is like asking me to recommend a pedophile to baby-sit at a nursery school. And this bankster scoundrelism is not a one-time occurrence. Bank of New York Mellon and other money center banks have been peeling the skin off public and private pension plans for decades, and it took a whistleblower to bring this travesty to court.

Pension plan beneficiaries — common folks like us, who need those dimes and dollars — are easy marks. Yet the trading patterns of those big banks are so obvious that even I could smell the stink. The state employees who monitor these plans are either a bunch of stupids or in league with the banks — or both.

BK is a reigning member of what I call the Blue Blood Mafia. Its shares were trading in the low $40s during the worst of the 2007 and 2008 markets. Still, during the last 12 months, the company generated $15 billion in revenues and nearly $3 billion of net income and maintained a book value of $28 a share plus $147 billion in cash. Wall Street reckons that BK’s numbers will improve by at least 10 percent next year.

With a price not much above its 52-week low of $17.10 a share, BK hasn’t traded this low in 20 years, which should give you some inkling of how damaging these charges might be. However, the shares could move higher on speculation that the bank might divest itself of some assets to protect its value if these lawsuits become sticky wickets.

In the meantime, management will lawyer up with the slickest mouthpieces and the most powerful lobbyists on the Street, and then it will call in IOUs from influential members of Congress with whom BK is as thick as thieves. The bank will not be ignored by these influential members of Congress, and that augurs well for a share-price recovery to the $25 to $30 level in the coming 12 months.

The 52-cent dividend yields 2.4 percent and is certain to be raised (some believe) to 75 cents in 2012 if earnings meet projections of $2.40 a share. Meanwhile, BK’s officious CEO, Robert Kelly, who doesn’t look down his nose at people but rather looks down his chin, resigned on Aug. 31. He left with a super-generous package, most of which will not be revealed. The stories he could tell would make Gordon Gekko seem like an angel.

Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, Fla. 33775, or email him at mjberko@yahoo.com. © 2011 Creators.com