Tort Law
State Street Corp. Readies for Lawsuits Related to Subprime Losses
Posted Jan 3, 2008, 09:43 am CST
By Debra Cassens Weiss
State Street Corp. is reserving $618 million to fund legal and other costs after customer complaints that they were improperly exposed to investments in subprime mortgages.
The CEO of the unit subject to the complaints, State Street Global Advisors, is being replaced, the Wall Street Journal reports (sub. req.).
The company said customers have complained their fixed-income investments were harmed by exposure to subprime mortgages. The financial services firm will take an after-tax charge of $279 million for the legal set-aside.
CEO Ronald Logue said five lawsuits have been filed against the firm to recover investment losses, including three seeking class-action status, the Associated Press reports.