Press Releases
 
State Street Enters into Settlements with Regulatory Authorities to Resolve Inquiry into Losses by Certain Active SSgA Fixed-Income Strategies During 2007

04/02/2010
 

Previously Established Legal Reserve Sufficient to Fully Cover Cost of Settlements

BOSTON, February 4, 2010 – State Street Corporation (NYSE: STT) today announced that it has entered into settlements with the Securities and Exchange Commission (SEC), the Massachusetts Attorney General and the Massachusetts Securities Division of the Office of the Secretary of State to resolve their investigations into losses incurred by and disclosures made around certain active fixed-income strategies managed by State Street Global Advisors (SSgA) during 2007 and earlier periods.  In reaching these settlements, State Street has not admitted or denied the allegations made by the regulators.

Under the terms of the agreement with the SEC, State Street has agreed to establish a $313 million fair fund, which includes a fine of $50 million and disgorgement of advisory fees and interest of approximately $8 million.  Combined with the approximately $350 million in prior client settlements, the total compensation to investors will be approximately $663 million.  The allocation of the payments from the fair fund to former investors in the active fixed-income funds has been agreed upon with the SEC. Under the settlements with the Commonwealth of Massachusetts, State Street has agreed to pay $10 million to each of the Massachusetts Secretary of State and the Massachusetts Attorney General.  State Street’s previously established legal reserve will fully cover the cost of the settlements. 

Ronald E. Logue, State Street’s chairman and chief executive officer said, “We value our reputation as a trusted fiduciary to institutions around the world and we recognize the critical importance of fulfilling our fiduciary obligations. As such, we were determined to work with our regulators and with our customers to resolve their concerns around investments in certain of SSgA’s active fixed-income strategies in 2007. We remain committed to building on SSgA’s comprehensive organizational and infrastructure changes implemented over the past 24 months to ensure that our practices not only meet but exceed industry standards.”

About State Street Corporation
State Street Corporation (NYSE: STT) is one of the world's leading providers of financial services to institutional investors including investment servicing, investment management and investment research and trading. With $18.8 trillion in assets under custody and administration and $1.9 trillion in assets under management at December 31, 2009, State Street operates in 25 countries and more than 100 geographic markets worldwide. For more information, visit State Street’s web site at www.statestreet.com.

 
 
Back to Press Releases