In an emailed statement by a spokeswoman, State Street said its agreement with the SEC ends all government investigations into the excessive cost of its transition management services, which the SEC said generates about $20 million in inappropriate revenue for the company. In addition, the SEC said in a statement that State Street has agreed to pay a fine of $US 3 million, without admitting or denying that its miscarriages of disclosure related to its Securities Trading Platform GovEx violated the law. “State Street participated in a sophisticated overload system that resulted in millions of illegally acquired profits and violated the trust of its customers,” the special agent told Charge Shaw. “This agreement with State Street demonstrates the FBI`s commitment to aggressively pursue financial fraud, detect systems that undermine investor trust, and hold financial institutions to account.” State Street entered into a Deferred Prosecution Agreement (DPA) in connection with a criminal investigation that charged it with conspiracy to commit wire and securities fraud. The FBI`s Boston Field Office investigated the case. Attorney Aisling O`Shea of the Criminal Squad and U.S. Deputy Attorney and Deputy Head of the Department of Economic Crimes Stephen E. Frank of Massachusetts is following the case. The SEC provided valuable support to the prosecution.
Massachusetts-based global financial services firm State Street Corporation (State Street) reached an agreement on the deferred lawsuits and agreed to pay a $32.3 million fine to clarify allegations that it was involved in a plan to defraud a number of the bank`s customers by secretly applying commissions on multi-billion dollar corporate actions. State Street also agreed to offer the U.S. Securities and Exchange Commission (SEC) an equivalent amount as a civil penalty. The Department of Fraud plays a central role in the Ministry of Justice`s fight against economic crime throughout the country. Today`s resolution is part of the efforts of President Obama`s Financial Action Task Force (FFETF), established in November 2009, to engage in aggressive, coordinated and proactive efforts to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. law firms, and state and local partners, the largest coalition of law enforcement, investigative, and regulatory agencies ever formed to combat fraud. Since its establishment, the Task Force has made great strides in facilitating the intensification of the investigation and prosecution of financial crimes; improve coordination and cooperation between the Federal State, the Land and the municipalities; combat discrimination in credit and financial markets and public relations, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 defendants of mortgage fraud.
For more information on the Task Force, see www.stopfraud.gov. State Street had previously announced that it had reached an agreement in principle on the payment of the $3 million fine. That figure includes $32.3 million that State Street was willing to pay to the SEC to settle fraud charges for secret markups. State Street also reached a deferred prosecution agreement in January with U.S. Justice Department officials on the case and agreed to pay an equivalent amount to the agency. In 2017, State Street agreed to pay $64.6 million to settle related criminal and civil investigations in the United States and reached an agreement on deferred prosecutions.