BOSTON Oct 19 A Boeing Co worker has
filed a lawsuit seeking class-action status against State Street
Corp over currency trades in the airplane maker's $34
billion retirement plan.
State Street is accused of overcharging on forex trades made
by a global index fund in the plan which is run by State
Street's own asset management arm.
The civil lawsuit, filed this week in U.S. District Court in
Boston, opens a new front in the forex litigation against the
Boston-based custody bank. Previous forex lawsuits against State
Street have focused on trades executed for funds run by outside
money managers not by State Street Global Advisors, or SSGA, the
bank's own asset management arm.
State Street's pricing on foreign exchange trading is
already the subject of U.S. government investigations, including
by the Justice Department, the Department of Labor and the
Securities and Exchange Commission. And pension funds in several
states have sued over trades State Street performed on their
In the latest lawsuit, The Andover Companies and James
Pehoushek-Stangeland, a Boeing worker in Seattle, accuse State
Street of self-dealing by allowing "its currency traders to
pilfer plan assets by improperly marking up and marking down
foreign currency trades."
Pehoushek-Stangeland participates in a Boeing retirement
plan whose investment options include an international index
fund managed by SSGA, according to the lawsuit. At the end of
last year, Boeing's retirement plan had $1.86 billion invested
in the fund, or 5.5 percent of the plan's assets.
State Street on Friday reiterated it has done nothing wrong.
"As we have previously stated, State Street continues to
vigorously defend the litigation that has been commenced against
us regarding our indirect FX services," the bank said.
The international index fund also appears as part of several
other investment options in the Boeing investment plan. Boeing
did not return messages seeking comment.
For U.S.-based workers, investments in international funds
and companies are done in foreign currencies after their cash is
converted to euros from dollars, for example. And when they earn
dividends from an investment in a European stock, the income is
converted to dollars from the foreign currency, a process called