AG: State Street will return $75M in profit in transactions flap
State Street and Trust Co. will return $75 million in profits in an agreement aimed at resolving allegations it provided misleading information about how it priced foreign exchange transactions, Attorney General Maura Healey announced yesterday.
“This agreement will help protect the investments and savings of many retirees in Massachusetts,” Healey said in a statement. “Our office will continue our efforts to protect the assets of Massachusetts residents to help ensure their financial security.”
Healey’s office alleged that State Street misled custody clients by indicating they would receive more favorable exchange rates using Indirect FX than they actually did.
The agreement is part of a $382 million federal-state global resolution in conjunction with the U.S. Securities and Exchange Commission, U.S. Department of Justice, and U.S. Department of Labor, along with three class-action lawsuits, Healey said.
The agreement requires State Street to provide $75 million in disgorgement, along with a payment of $500,000 to the state. Additional disgorgement and penalties will be paid by State Street through separate agreements with federal enforcement entities, Healey said.
Although State Street has already started providing more detailed information about how it prices Indirect FX, the agreement with the attorney general’s office “ensures that State Street continues to do so,” according to the announcement.