State Street Corp. has settled litigation arising out of losses by investors in some strategies managed by State Street Global Advisors. The company will pay $89.8 million in the lawsuit seeking class-action status regarding investors in active fixed income funds. The settlement agreement is subject to court approval. State Street has added $250 million to its legal reserve which brings the total reserve to $443 million. The company says that should cover the potential resolution of proceedings by the Securities and Exchange Commission and other government authorities as well as the lawsuit.
Adding to the company’s woes, California filed a suit against State Street in October, claiming the bank secretly overcharged both the state’s retirement system, Calpers, and the state’s teachers’ retirement system by more than $56 million in currencies trades since 2001. State Street has denied any wrongdoing in that suit and said it will defend itself against any litigation.
Source: CNN Money
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