8-KOther Events

STATE STREET CORP 8-K Report, Corporate Update (May 14, 2015)

Filed May 14, 2015For Securities:STTSTT-PG

Summary

State Street Corporation (STT) filed an 8-K on May 14, 2015, disclosing a significant regulatory development. The company expects to enter into a public enforcement action with the Federal Reserve and the Massachusetts Division of Banks due to identified deficiencies in its compliance program related to the Bank Secrecy Act, anti-money laundering (AML) regulations, and U.S. economic sanctions. This enforcement action will likely involve a written agreement requiring substantial improvements to State Street's compliance programs and the engagement of an independent firm to review account and transaction data for suspicious activity. Investors should note the potential for fines and other regulatory sanctions if historical reporting deficiencies are found or if the company fails to adhere to the agreement, which could materially impact State Street's financial performance and reputation.

Key Highlights

  • 1State Street Corporation anticipates a public enforcement action from the Federal Reserve and the Massachusetts Division of Banks.
  • 2The enforcement action stems from identified deficiencies in the company's compliance programs for the Bank Secrecy Act, AML, and U.S. economic sanctions.
  • 3A written agreement is expected, mandating improvements to compliance programs.
  • 4An independent firm will be retained to conduct a transaction review of historical account and transaction data.
  • 5Potential for fines and other regulatory sanctions if deficiencies are confirmed or the agreement is not met.
  • 6Such sanctions could have a material adverse effect on the company.
  • 7This disclosure was made in conjunction with a preliminary prospectus filing for a proposed offering of preferred stock.

Frequently Asked Questions

The enforcement action is a result of identified deficiencies in State Street Corporation's and State Street Bank and Trust Company's compliance programs concerning the Bank Secrecy Act, anti-money laundering (AML) regulations, and U.S. economic sanctions.

The written agreement is expected to require State Street to implement improvements to its compliance programs and to retain an independent firm to conduct a review of account and transaction data from a prior three-month period to identify and report suspicious activity.

If deficiencies in historical reporting are identified as a result of the transaction review, or if State Street fails to comply with the terms of the written agreement, the company may be subject to fines and other regulatory sanctions, which could have a material adverse effect on its business.

This information was disclosed in a Form 8-K filing dated May 14, 2015, and was also included in a preliminary prospectus filed by State Street Corporation.