SEC Intends to Charge State Street for Solicitation Practices

Last year, State Street revealed it was under investigation for its solicitation of asset-servicing business for public retirement plans.

State Street Corporation announced in an 8-K filing that the enforcement staff of the U.S. Securities and Exchange Commission has provided it with a “Wells” notice.

The notice relates to a previously disclosed SEC investigation into State Street’s solicitation of asset servicing business for public retirement plans and, specifically, its relationships with particular clients in two states during a period ending in 2011. The investigation includes State Street’s use of consultants and lobbyists and, in at least one instance, political contributions by one of its consultants during and after a public bidding process.

The issuance of a Wells notice provides State Street with the opportunity to make a submission to the Commission in response to the SEC staff’s position, and State Street says intends to submit a response. A spokesperson for State Street told PLANSPONSOR’s sister publication CIO the firm “eliminated the hiring of consultants and lobbyists for our asset servicing dealings with U.S. public retirement plans in support of our sales efforts” three years ago.

When it disclosed the SEC investigation last year, State Street noted, “adverse outcomes could have a material adverse effect on our business and reputation.”