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$300 Million Recovered in Currency Scandal

Arkansas Teacher Retirement System v. State Street Corp.

Labaton Sucharow takes its representation of nearly 200 U.S. pension funds very seriously. When news broke out that State Street, the custodian bank for more than 40 percent of U.S. public pension funds, was allegedly overcharging its customers on foreign exchange (FX) trades, we welcomed the challenge.

As lead counsel, Labaton Sucharow and lead plaintiff Arkansas Teacher Retirement System (ATRS) led the charge against the Boston-based financial services company. We spearheaded the investigation of the bank’s decade-long scheme, racking up millions of dollars a year. This was particularly challenging since there is a lack of regulation and/or commonly reported exchange rates, making it impossible for State Street’s public pension funds to detect this ongoing deception. Months after we filed the complaint, which outlined the Firm’s extensive investigative findings and damage calculations, the SEC and DOJ announced their own investigation into State Street’s deceptive FX practices.

“The plaintiffs’ counsel were required to develop a novel case. This is not a situation where they piggybacked on the work of a public agency that had made certain findings. They were required to be pioneers to a certain extent... They had to stand up on behalf of the class to experienced, able, energetic, formidable adversaries. They did that. And as I said, they generated a fair and reasonable return for the class, $300 million.”
- Judge Mark L. Wolf during the final approval hearing

After surviving a motion to dismiss, review and analysis of several million pages of documents, and consultation with multiple experts, Labaton Sucharow entered into negotiations with State Street, as recommended by the court. After 19 mediation sessions, spanning more than four years, we secured a $300 million recovery for the class. During the final approval hearing, the court commended ATRS and Labaton Sucharow for successfully taking on a novel and challenging case, highlighting that this case was initiated prior to any regulatory investigation.

State Street also separately entered into agreements with the U.S. Department of Justice, the U.S. Securities and Exchange Commission, and the U.S. Department of Labor, amounting to a total payout of nearly $530 million in private and government settlements.

Please visit the State Street case abstract to view additional details and case materials.