Arkansas Teacher Retirement System v. State Street Corp.

Labaton Sucharow serves as lead counsel for the plaintiff Arkansas Teacher Retirement System (ATRS) in this class action against Boston-based financial services company, State Street Corporation (State Street). On November 2, 2016, the court granted final approval of a $300 million settlement with State Street.

The plaintiffs claim that State Street, as custodian bank to a number of public pension funds, including ATRS, was responsible for foreign exchange (FX) trading in connection with its clients' global trading. Over a period of many years, State Street systematically overcharged those pension fund clients, including Arkansas, for those FX trades. Despite actually transacting FX exchanges within the legitimately recognized “range of the day,” State Street reported to its clients exchange rates far less favorable to those clients. Due to the lack of regulation and transparency in the FX industry, it was all but impossible for State Street’s public pension funds to detect this ongoing deception. After surviving a motion to dismiss, review and analysis of several million pages of documents, consultation with experts, and multiple negotiation and mediation sessions, the parties came to an agreed-upon settlement. State Street also separately entered into agreements with the Department of Justice, the Securities and Exchange Commission, and the Department of Labor.

At the final approval hearing, the court commended Arkansas Teacher Retirement System and Labaton Sucharow for their work. “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 were required to engage in substantial discovery that included production of nine million documents. They engaged in arduous arm's length negotiation that included 19 mediation sessions. 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.”

Final Approval

A final approval hearing was held on November 2, 2016 at 2:00 p.m., at which the court approved the settlement and related relief. There is no claim process, however if you are a Group Trust or represent a Group Trust, you were required to submit a certification by December 20, 2016, as explained in the Notice.

If you have questions about the settlement, please contact Labaton Sucharow at settlementquestions@labaton.com or 1-888-219-6877, or contact the Claims Administrator, A.B. Data, Ltd., at 877-240-3540.

Additional Proceedings After November 2, 2016

After the final approval hearing was held, and the settlement and request for attorneys’ fees and expenses were approved, Lead Counsel notified the court of certain inadvertent errors in the motion for fees and expenses previously submitted to the court. On March 8, 2017, the court appointed a special master to review the original fee and expense application and to issue a report and recommendation. The special master’s report and recommendation was issued on June 28, 2018. On February 27, 2020, the court issued a decision that modified the special master’s report and recommendation. All filings with the court concerning these additional proceedings are available using the links to the right.

Additionally, the court has ordered that any class member may object to the Court’s February 27, 2020 decision by submitting a written statement by no later than September 8, 2020. The court will hold a hearing to consider any objections on September 22, 2020 at 2:00 p.m. (to be held in person, telephonically or by videoconference at the Court’s discretion). A notice about these further proceedings is available using the link to the right.

The case is Arkansas Teacher Retirement System v. State Street Corp. et al., No. 11-cv-10230 (D. Mass.). The lead plaintiff is Arkansas Teacher Retirement System. The defendant is State Street Corporation.