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State Street to pay $382 million for foreign currency exchange fraud

Jaclyn Jaeger | July 28, 2016

State Street Bank and Trust Company, a financial institution, this week agreed to pay a total of $382.4 million to the United States to resolve allegations that it deceived some of its custody clients when providing them with indirect foreign currency exchange (FX) services. 

As part of the settlement, State Street will pay $155 million to the Department of Justice for violations under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).  The government’s investigation arose from whistleblower claims

$167.4 million in disgorgement and penalties to the SEC; and at least $60 million to ERISA plan clients in an agreement with the Department of Labor.

As part of the settlement with the Justice Department, State Street admitted that contrary to its representations to certain custody clients, its State Street...

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