State Street says it may have overcharged clients by $200M or more

BOSTON – State Street Corp. said Thursday that it may have overcharged asset servicing clients by $200 million or more over the past 18 years.
In a press release on its website, the financial services holding company, which operates in more than 100 markets worldwide, said it is informing clients that it is reviewing the matter, and is looking into the amounts invoiced for specific categories of expenses.
It said it could be subject to litigation and governmental investigations as a result of the announcement.
“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 practice,” the press release said.
Over the nearly 20-year period, State Street said it estimates that it has invoiced asset servicing clients approximately $400 million for expenses falling within the categories being reviewed, with annual amounts invoiced for these expenses ranging from approximately $9 million in the early years to approximately $36 million in 2014.
The company said the actual amount to be reimbursed to clients will not be known until the review is completed. In fiscal 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.
Additional information on the matter will be provided during State Street’s fourth-quarter earnings release on Jan. 27.

No posts to display