Berman DeValerio class
Complaint filed January 2010. Alleges that State Street
misled investors regarding its exposure to losses in
off-balance-sheet conduits, securities lending and its own
investment portfolio. Also alleges fraudulent pricing of FX
Carpenters Labor Management Pension
Case filed in December 2009 claiming that investment in
the Russell 1000 Value Lending fund led to illiquidity due to
investment in asset-backed securities. Pending.
Public School Retirement System of
Case filed in September 2009. Lawsuit threatens to reduce
the value of the remaining $1.5 billion investment in Quality
D securities lending collateral pool unless state entity
returns $4.2 billion of the lending fund to provide
Fishman, Haygood, Phelps, Walmsley,
Willis and Swanson
Filed in April 2009. Class action on behalf of Erisa
plans invested in securities lending programme, alleging
investment in "highly risky, illiquid, long-term investments"
instead of high-quality, liquid instruments. Pending.
Twenty-one Erisa actions have also been brought
against State Street over its management of various plans.
Claims include knowingly holding imprudent investments,
misrepresentation and mismanagement and investing in risky
MBS. Seven cases have been dismissed and one preliminary
class settlement approved. State Street announced in November
2009 that it had entered into a proposed $89.75 million
settlement, subject to court approval.
Settlements with SEC and Massachusetts
In February State Street (SSgA) agreed to settle
various state and federal charges associated with
misleading investors over the funds exposure to
sub-prime investments, use of derivatives and leverage.
State Street was alleged to have provided certain investors
with more complete information than others. State Street
agreed to pay a $10 million civil penalty, pay $300 million
into a fund to compensate investors and pay an additional
$79 million if a related Erisa class action was not settled
by March 17.
SSgA Yield Plus Fund/Ning Yu
Filed June 2008. Alleged material
misrepresentation in offering documents. Case dismissed
SSgA/Mediq Pensioenfonds OPG
Alleged transferral of fund securities to
Lehman Brothers to be commingled with Lehman assets. Claims
State Street failed to disclose risk to investors. A Dutch
court ruled against SSgA in December 2009 awarding a
40 million settlement to Mediq.
SSgA World Index Plus Edge Common Trust
Fund/Stichting Pensioenfonds British American Tobacco
SSgA Europe Index Plus Edge Common Trust
Fund/Stichting Pensioenfonds Medewerkers Apotheken
Filed December 2009 and February 2010. Alleges
transfer of fund securities to Lehman Brothers to be
commingled with Lehman assets. Claims State Street failed
to disclose risk to investors.
Kendall Law Group class action
Alleged misleading statements relating to the
mark-up of FX trades. Filed February 2010 in the District
California attorney general
Filed October 2009 alleges "unconscionable
fraud" against Californias two largest pension funds
for illegally overcharging for FX trades. State Street has
categorically denied any allegation of wrongdoing.
The case against State Street
What State Street says...