State Street says SEC probes its forex pricing
(Reuters) - State Street Corp (STT.N), the world's third largest institutional investor, said it was under investigation by the Securities and Exchange Commission (SEC) for its foreign exchange pricing methods for pension plans.
The SEC's investigation comes a week after two top Massachusetts officials began reviewing foreign exchange trading operations involving State Street and rival Bank of New York Mellon (BK.N).
State Street, which provides services such as record-keeping for mutual and hedge funds, disclosed the regulatory inquiry in a quarterly filing on May 9.
Traditionally a very profitable area for the banks, forex has come under scrutiny following whistleblower complaints. In various lawsuits, banks are accused of inflating profits by charging customers more than foreign exchange trades actually cost.
The firm also disclosed that two clients began litigation against it seeking unspecified damages, including treble damages, on behalf of all custodial clients that executed foreign exchange transactions through State Street.
State Street was not immediately available for comment.