A federal judge said Wednesday the U.S. government can proceed with a lawsuit accusing Bank of New York Mellon Corp of overcharging clients for trading currencies, a case brought under a rarely-used financial fraud law.

While dismissing some of the fraud claims, U.S. District Judge Lewis Kaplan in Manhattan said the complaint "generally suffices" to let the government pursue its main claim, that the bank fraudulently misrepresented that it would provide "best execution" to various trading clients.

The ruling marked a significant victory for the U.S. Department of Justice, which had sought to use a powerful law adopted in the wake of the savings and loan scandals of the 1980s to bring civil fraud cases against Wall Street banks.

The law, the Financial Institutional Reform, Recovery and Enforcement Act of 1989, provides for a low burden of proof, strong subpoena power and a 10-year statute of limitations. It had not been applied much until recently.

The Justice Department has asserted the law in mortgage-related cases pending against Bank of America Corp and Wells Fargo & Co. Those banks have sought to dismiss the claims filed under the law on grounds similar to BNY Mellon.

Kevin Heine, a spokesman for BNY Mellon, had no immediate comment.

A spokeswoman for Manhattan U.S. Attorney Preet Bharara, whose office filed the case, declined comment.

(Reporting by Jonathan Stempel in New York; Editing by Martha Graybow, Bernard Orr)