Update: ERISA Plan Investors File Proposed Consolidated Amended Class Action Complaint Against State Street Bank Announces Berns
March 27 2008 - 4:12PM
Marketwired
NEW YORK, NY (NYSE: STT) alleging that State Street breached its
fiduciary duties under the federal Employee Retirement Income and
Security Act ("ERISA") from January 1, 2007 through December 31,
2007 to the plans by causing State Street's purportedly
conservative fixed income bond funds to make imprudent investments
in high-risk and/or highly leveraged financial instruments tied to,
among other things, volatile asset-backed and subprime
mortgage-backed securities. The State Street bond funds at issue
(the "Bond Funds") include the:
-Enhanced Intermediate Bond Fund;
-Intermediate Bond Fund for Employee Trusts;
-Daily Bond Market Fund, the Daily Corporate / Government Credit Bond Fund;
-SSgA Government Credit Bond Non-Lending Fund;
-SSgA Yield Plus Fund;
-Total Bond Market Fund;
-SSgA Bond Market Fund;
-Bond Market Non-Lending Fund;
-Limited Duration Bond Fund;
-SSgA Intermediate Bond CTF Fund;
-SSgA Intermediate Bond NL Fund, and;
-the Short Term Bond Fund.
The class action plaintiffs seek a recovery for all ERISA plans
which invested in these funds and suffered losses. Three class
actions have already been consolidated under the caption In re
State Street Bank and Trust Co. ERISA Litigation, No. 07 Civ. 8488
(S.D.N.Y.) (RJH). The court-appointed Lead Plaintiffs in the
action, consisting of fiduciaries of the Unisystems, Inc.,
Employees' Profit Sharing Plan, the Andover Companies Employees
Savings & Profit Sharing Plan and the Nashua Corporation
Retirement Plan, allege that investors in various State Street bond
funds saw the performance of their investments in the Bond Funds
plummet in 2007, with the performance of some of the Bond Funds
lagging their benchmark indices by as much as 30%. State Street has
publicly acknowledged that it has "received inquiries from
regulatory authorities" regarding its fixed-income strategies, and
that it has set aside approximately $625 million in reserves for
"legal exposure and related costs in connection with [its] fixed
income strategies." In January 2008, State Street also announced
that the President and CEO of State Street Global Advisors
("SSgA"), William W. Hunt, had resigned, and six senior members of
SSgA's "fixed income team" have reportedly been terminated.
Discovery in the consolidated class action is presently
underway. ERISA plans, ERISA-governed plan participants or their
counsel who have questions concerning the Bond Funds, the pending
class action law suit against State Street or the proposed
Consolidated Amended Complaint may contact any of the undersigned
court-appointed Lead Counsel listed below.
Contact: William C. Fredericks Jerald D. Bien-Willner BERNSTEIN
LITOWITZ BERGER & GROSSMANN LLP 1285 Avenue of the Americas New
York, New York 10019 Telephone: (212) 554-1400 Email:
wfredericks@blbglaw.com Derek W. Loeser Karin B. Swope KELLER
ROHRBACK LLP 1201 Third Avenue, Suite 3200 Seattle, Washington
98101 Telephone: (206) 623-1900 Email: dloeser@kellerrohrback.com
Jeffrey C. Block Patrick T. Egan BERMAN DEVALERIO PEASE TABACCO
BURT & PUCILLO One Liberty Square Boston, Massachusetts 02109
Telephone: (617) 542-8300 Email: jblock@bermanesq.com
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