Boston-based State Street Corp. traces its history back to 1792 and now manages more than $3 trillion in assets, yet it has always maintained a lower profile than the goliaths of Wall Street. Recently, the company was in the spotlight, though not in a good way.
The U.S. Attorney's Office for Massachusetts announced that State Street would pay a $115 million criminal penalty to resolve charges that it engaged in a scheme to defraud a number of its clients by secretly overcharging for expenses related to the bank's custody of client assets.
"State Street defrauded its own clients of hundreds of millions of dollars over decades in a most pedestrian way," said Acting U.S. Attorney Nathaniel Mendell. "They tacked on hidden markups to routine charges for out-of-pocket expenses."...