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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 businesses.
"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 UK.