Penn. Law Firm Probes State Street Stock-Drop Case

Attorney Howard G. Smith said his firm is investigating whether the State Street 401(k) Savings Plan or the Employee Stock Ownership Plan continued to invest in company stock after it was no longer prudent to do so and whether such actions represented a fiduciary breach under ERISA.

The Boston investment company has been hit with a variety of lawsuits in recent months alleging wrongdoing in several State Street operations. The cases include:

• charges that investors in company shares between October 2006 and October 2009 lost money because State Street was not truthful about its exposure to potentially large financial losses (see “State Street Sued Over Stock-Loss Allegations”);
• allegations that State Street mismanagement caused losses relating to its securities lending program (see “Cover: Plowing New Fields”);
• charges that the firm has been overcharging institutional clients as part of foreign currency trades (see “State Street Hit with Forex Overcharge Suit”).