BOSTON--(BUSINESS WIRE)--
State Street Corporation announced today that it is informing clients
about a review that it initiated into the manner in which it invoiced
certain expenses to asset servicing clients. The review, which is not
complete, addresses the amounts invoiced for specific categories of
expenses. Based on the results of the review to date, State Street
believes that it has incorrectly invoiced certain expenses to asset
servicing clients, primarily in the United States. State Street deeply
regrets this matter. At the conclusion of its review, State Street will
compensate affected clients fully, including interest, and make any
required improvements to its billing practices.
Based upon the Company’s preliminary assessment, over the 18-year period
for which it has accessible records, approximately $200 million or more
of expenses may have been incorrectly invoiced. During this 18-year
period, State Street estimates that it has invoiced asset servicing
clients a total of approximately $400 million for expenses falling
within the categories being reviewed. Annual amounts invoiced for these
expenses ranged from approximately $9 million in the early years to
approximately $36 million in 2014. The actual amount to be reimbursed to
clients will not be known until the review is completed, and that amount
could differ materially from the Company’s preliminary assessment. In
fiscal year 2014, the categories of expenses under review represented
approximately 0.7 percent of State Street’s total asset servicing fee
revenue of $5.1 billion.
The Company will provide additional information on this matter in its
scheduled fourth quarter 2015 earnings release and call on January 27,
2016.
About State Street Corporation
State Street Corporation (NYSE: STT) is one of the world's leading
providers of financial services to institutional investors, including
investment servicing, investment management and investment research and
trading. With $27.3 trillion in assets under custody and administration
and $2.2 trillion* in assets under management as of September 30, 2015,
State Street operates in more than 100 geographic markets worldwide,
including the US, Canada, Europe, the Middle East and Asia. For more
information, visit State Street’s website at www.statestreet.com.
* Assets under management include approximately $25 billion as of
September 30, 2015, for which State Street Global Markets, LLC, an
affiliate of SSGA, serves as the distribution agent.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning
of U.S. securities laws, including statements about State Street’s goals
and expectations regarding its review into the manner in which it
invoiced certain expenses to asset servicing clients, including the
potential results of that review and related matters. Terminology such
as “believe,” “will,” “estimate,” “may,” “expect,” “intend,” “priority,”
“outlook,” “objective,” “plan,” “forecast,” “anticipate,” “seek,”
“trend,” “target,” “strategy” and “goal,” or similar statements or
variations of such terms, are intended to identify forward-looking
statements, although not all forward-looking statements contain such
terms. These statements are not guarantees of future results or
performance, are inherently uncertain, are based on current assumptions
that are difficult to predict and involve a number of risks and
uncertainties. Therefore, actual outcomes and results may differ
materially from what is expressed in those statements, and those
statements should not be relied upon as representing State Street’s
expectations or beliefs as of any date subsequent to December 17, 2015.
Important factors that may also affect future results and outcomes
include, but are not limited to:
-
the findings and conclusions, and the other results of, State Street’s
review of the way that it invoiced certain expenses to asset servicing
clients, including the ultimate timing of concluding such review, the
amounts of any expenses determined to be reimbursable, either in the
aggregate or to any one or more specific clients, and other results of
such review and the outcomes of communications with clients, and of
State Street’s responses to any regulatory inquiries, regarding such
review and related matters;
-
the results of, and costs associated with, governmental or regulatory
inquiries and investigations, litigation and similar claims, disputes,
or proceedings; and
-
adverse publicity, whether specific to State Street or regarding other
industry participants or industry-wide factors, or other reputational
harm.
Other important factors that could cause actual results to differ
materially from those indicated by any forward-looking statements are
set forth in State Street’s 2014 Annual Report on Form 10-K and its
subsequent SEC filings. State Street encourages investors to read these
filings, particularly the sections on risk factors, for additional
information with respect to any forward-looking statements and prior to
making any investment decision. The forward-looking statements contained
in this news release speak only as of the date hereof, December 17,
2015, and State Street does not undertake efforts to revise those
forward-looking statements to reflect events after that date.
View source version on businesswire.com: http://www.businesswire.com/news/home/20151217005207/en/
State Street Corporation
Anthony Ostler, +1 617-664-3477
or
Carolyn
Cichon, +1 617-664-8672
Source: State Street Corporation