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BATON ROUGE, La. – November 17, 2017 – The national law firm of Baron & Budd is pleased to...READ MORE
Massachusetts Attorney General Martha Coakley has reached a settlement with State Street Bank & Trust Company in connection with allegations that the institution misled fund investors concerning risky investments. The agreement also covered allegations that State Street neglected to provide investors with information necessary to decide whether to remain invested in various collective trust funds managed by the institution’s fixed income portfolio management team. Coakley’s suit was filed pursuant to the Massachusetts Consumer Protection Act and the state’s False Claims Act.
The sizable settlement, which is Coakley’s largest securities recovery thus far, will benefit about 270 investors, including religious institutions, charities, non-profit companies and retirement funds. In addition, State Street will have to make another very large payment to the investors if the institution does not resolve claims now pending in a separate class action filed in federal court in New York concerning specific ERISA investment claims. Further, State Street will also have to pay a substantial penalty as part of the Massachusetts settlement.
State Street’s alleged misconduct occurred during the 2007 subprime market crash, when State Street failed to tell one group of investors of the extent of the funds’ subprime risk exposure and suggested that investors retain their interest in the funds. At the same time, State Street recommended that its advisory clients liquidate their holdings in the same risky funds. When those clients sold their shares, the remaining investors were left with large losses and illiquid assets.
For more information, go to Legal Newsline.