Copying and distributing are prohibited without permission of the publisher
FCA fines State Street for TM failings
03 February 2014
State Street UK’s transition management business overcharged clients $20,169,603
"In 2011, we dismissed individuals centrally involved in the
overcharging of transition management clients. Their behavior
was unacceptable and a significant departure from the high
standards of conduct and transparency that we expect and
certainly not consistent with the manner in which our employees
act on behalf of clients every day.
"Also in 2011, we notified all transition management clients
about the overcharging, only six of whom were directly
affected. We continue to have an open and transparent dialogue
with our transition management clients to ensure they are aware
of the actions we have taken over the past several years to
strengthen our controls.
"We believe we now have industry leading controls within our
transition management business and have bolstered our control
functions in the UK, broadening the depth of talent that
oversees our businesses.
"We have fully cooperated with the FCA during their
investigation and appreciate that the FCA's notice acknowledges
the overcharging identified in the settlement relates only to
our UK transition management business, that we have implemented
a comprehensive remediation program in relation to the controls
around the UK TM business, and that we have bolstered our
control functions, governance and culture across all of our UK
"We are confident that we have addressed the weaknesses
highlighted in the FCA's notice and as a result, have emerged
as a stronger organisation."
State Street UK agreed to settle at an early stage of the FCA's
investigation and has therefore qualified for a 30% discount.
Were it not for this discount, the FCA would have imposed a
financial penalty of £32,692,800 on State Street