"State Street to repay $313m to investors; Finance giant ends US, state inquiry" by Beth Healy, Globe Staff | February 5, 2010
State and federal regulators yesterday announced a $313 million settlement with State Street Corp. over allegations that it misled pension funds, towns, and other large clients across the country about risky investments in a bond fund.
The newspaper just can't see clear to use the word LIE, can they?
I guess that's because THEY DO IT all the time!!!
The Securities and Exchange Commission alleged that the Boston financial services giant had warned some investors, but not others, in the summer of 2007 that it had loaded up on shaky subprime mortgage investments in a fund touted as conservative. As a result, some customers - including State Street’s own retirement fund - were able to cash out, while others were stuck with steep losses.
And I'll bet it's all WHO YOU BLOW, I mean, KNOW!!!!!
Then they SHOULD NOT have LIED about it, huh?
Like I'm going to feel sorry for these s***ters!
In addition to yesterday’s settlement, State Street has separately paid $350 million to other investors who suffered losses in the same bond fund, for total reimbursements of $663 million.
So how much profit did they make?
State Street neither admitted nor denied the regulators’ allegations. The company’s chief executive, Ronald E. Logue, said in a statement, “We value our reputation as a trusted fiduciary to institutions around the world and we recognize the critical importance of fulfilling our fiduciary obligations.’’ He said the company cooperated with regulators, and that its legal reserves would cover the settlements....
Yeah, but ONCE the TRUST is gone so are you!
State Street Global Advisors has already reorganized its business in the aftermath of the bond fund’s problems, hiring a new chief executive, new head of fixed-income investing, and new chiefs of risk and compliance....
I don't care; once tainted, never trusted again. It's a simple rule to live by.
How so much risk crept into a fund that was described on company fact sheets as “a diversified portfolio of highly rated fixed income securities’’ remains something of a mystery.
Pffffffft!!!
But the behavior became a widespread problem over the past three years, as investors suddenly lost billions of dollars on failed money markets, auction-rate securities, and other products that Wall Street firms and banks had sold as cash-like investments....
That's why I never got into business. I dislike liars and looters!!!!
State Street’s bond fund not only waded more deeply into mortgage-related investments than advertised, but it also borrowed, using complex derivatives, to have an even larger stake in the securities, according to Attorney General Martha Coakley’s complaint.
Would you give them your money to play with? I wouldn't!
As early as February 2007, State Street started to see losses on these investments, according to the regulatory complaints. By July 26 that year, the firm mentioned the subprime troubles in a letter to investors, but it didn’t disclose the extent of the problem. Instead, it seemed to try to prevent a run on the bank, suggesting to investors that they’d be better off staying put.
What SCUM!! What WEASELS!!!!!!!
Meanwhile, “client at risk’’ alerts had gone out to employees within the firm, some of whom shared the information with outside clients. Between July 26 and Aug. 1, State Street sold $700 million of top-rated bonds in the fund, in order to meet the demand of the clients that wanted to get out. That left others holding the bag on illiquid, devalued securities, including subprime home equity loans....
But they are LOOKING OUT for YOU and YOUR MONEY, right?!!
As it was busy cashing out some customers, State Street was telling others it had taken measures to reduce risk, according to the complaints.
Translation: They LIED ALL the WAY ALONG, folks!!!
In fact, it downplayed the chaos, telling clients in letters that, “We believe that events in the subprime mortgage market have been more driven by liquidity and leverage issues than long term fundamentals.’’
But they wouldn't be lying to us now, right?
PFFFFFFFT!
--more--"
