August 3, 2011
State Street Litigation: Court denies motion to dismiss State Street securities fraud and ERISA class actions
On August 3, 2011, the U.S. District Court for the District of Massachusetts denied State Street Corporation's motion to dismiss securities fraud and ERISA claims brought by the company's shareholders and participants in its retirement plan.
The claims allege that State Street defrauded institutional investors - including the State of California's two largest pension funds, California Public Employees' Retirement System (CalPERS) and California State Teachers' Retirement System (CalSTRS) - by overcharging them for foreign exchange trades. It is also alleged that State Street misled investors about the quality of its portfolio of mortgage-backed securities. In her opinion denying the motion to dismiss, U.S. District Court Judge Nancy Gertner said, "The allegations support a plausible claim that the objective, prudent person who knew what defendants knew would have ceased to invest in State Street stock before October 2009."
Motley Rice securities lawyers are litigating the case, which is titled Hill v. State Street Corporation, No. 1:09-cv-12146-NG (D. Mass.), along with the law firms Bernstein Litowitz Berger & Grossmann LLP and Berman DeValerio.
Read more about the State Street case on Plansponsor.com.
Subscribers to The American Lawyer can read more about the State Street case in an article entitled "State Street Can't Dodge Securities and ERISA Claims over Mortgage Crash and Forex Trades, Judge Rules."