Thursday, April 14, 2016

State Street Medicine

It's for $tre$$ so open up!!

"State Street CEO takes a 23 percent pay cut to $10 million" by Beth Healy Globe Staff  April 07, 2016

State Street Corp. chief executive Joseph L. “Jay” Hooley earned $10 million last year, the company said, down 27 percent from 2014, marking the second straight annual decline in his pay.

Compensation fell across the top ranks of the Boston-based financial giant, as the board took into account lackluster financial performance and a series of costly lapses in oversight.

As a result, the panel awarded less cash and more stock.

Hooley, 59, was apparently willing to take his medicine.

That is one hell of a $poonful!

State Street’s revenue has been under pressure, in part due to low interest rates....

It still rose last year.


With all due respect, I'm tired of apologist fellatio when it comes to the pre$$ and the bankers.

Now take your medicine!

"Former State Street executives indicted over alleged fraud" by Beth Healy Globe Staff  April 05, 2016

Two former State Street Corp. executives were indicted on criminal securities fraud charges in an alleged scheme to overcharge six large clients, the US attorney in Boston said Tuesday, the latest legal black eye for the financial services company.

Ross McLellan, 44, of Hingham, and Edward Pennings, 45, a Dutch citizen believed to be in England, were charged in the five-count indictment. McLellan, a former executive vice president of Boston-based State Street, who served as head of its US broker-dealer unit, was arrested Tuesday morning in Hingham, officials said.

In what US Attorney Carmen Ortiz called a “brazen fraud,” the pair allegedly generated millions of dollars in improper trading commissions from June 2010 into September 2011, from clients who had already paid fees to State Street for handling their accounts.

The customers included a British government pension fund and a Middle Eastern sovereign wealth fund, according to Ortiz’s office.

State Street spokeswoman Carolyn Cichon said the employees had been terminated by the company several years ago. She said State Street has been cooperating with US authorities for the past few years.

McLellan pleaded not guilty Tuesday in US District Court in Boston and was released on $250,000 bond secured by his home. His lawyer, Marty Weinberg, in a statement said, “The evidence will ultimately and compellingly show that Ross McLellan committed no criminal acts and had no criminal intent.”

He also said the alleged behavior — charging clients “markups” on bond trades — is common, and that the profits were received by State Street, not McLellan.

McLellan has been running a Hingham firm called Harbor Analytics since 2012, according to his LinkedIn page. The Massachusetts state pension fund had hired him to evaluate some of its trading costs, paying him about $25,000 for the service, spokesman Eric Convey said.

“We suspended the relationship today,” Convey said.

I checked that, and the last I saw it was making small gains with big raises for managers (looks like skimming to me), but Galvin and Goldberg are looking after things. Good thing they didn't have a guy like Bill Gross running it.

A lawyer for Pennings could not be identified.

The charges are the latest in a series of employee conduct and oversight problems at State Street, which manages $2 trillion in client funds and provides administrative services on $28 trilllion in assets for pensions and mutual funds.

The company recently has been embroiled in cases related to financing a political campaign in Ohio in exchange for pension servicing business; overcharging clients for administrative services over 18 years, and overcharging for foreign exchange trading services.

Timothy Smith of Walden Asset Management in Boston, a $3 billion money manager and longtime State Street shareholder, said the question is whether these are one-off issues or part of a broader compliance problem.

“What we as investors expect for situations like this, is that they probe deeply into these situations, they learn what caused the problem,’’ Smith said. “Was it just a rogue individual or is it a pattern?”

I think that question has been answered.

State Street shares fell 2 percent on a generally down day for stocks....

Take that bitter pill!


Related: Saturday No Longer So Special

And now they will be handling GE's retirement assets.

"State Street Corp.’s efforts to cut costs have hit the global financial giant’s travel budget, with employees being asked to use “good judgment” in planning out-of-town trips. State Street reported first-quarter earnings of $319 million Wednesday. The Boston-based investment management and banking company did not put a dollar figure on the travel cuts but chief executive Jay Hooley said it’s part of a broader, multi-year plan to trim spending, including $100 million this year. Hooley said the company is encouraging options such as video conferences for short meetings with State Street colleagues in other cities. The company has been struggling to grow revenue in a low-interest rate environment and amid volatile stock markets early in the first quarter."