Galvin Hits State Street With $10M Fine, $300M In Payments
Secretary of the Commonwealth William Galvin said Boston-based State Street Bank & Trust Co. has been fined $10 million and ordered to pay more than $300 million in restitution to investors.
At issue is State Street's Limited Duration Bond Fund, which was first offered to investors in 2002. The settlement alleges that as the credit market began to sour in 2007, State Street tipped off certain clients to get out of the fund before the crash.
Galvin's office also alleged that State Street's Fixed Income and Client Services staff gave information to some investors, but not to all investors.
The settlement is in addition to a $350 million settlement State Street has paid to investors in private lawsuits.
The investigation was carried out by Galvin's office, the U.S. Securities and Exchange Commission and the state Attorney General's office.
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