The SEC said that State Street Bank and Trust Company will pay $12M to resolve civil charges accusing the firm of involvement in a pay-to-play scam. The regulator is accusing State Street of trying to gain contracts so it could do business with Ohio pension funds.
Vincent Debaggis, who helmed the public funds group of State Street Corp., is accused of entering into a deal with the deputy treasurer of Ohio. The arrangement allegedly included both illicit payments and political campaign contributions. In return for the money, State Street is accused of obtaining sub-custodian contracts that involved keeping the investment assets of certain Ohio pension funds safe and effecting the securities transaction settlements of the funds.
DeBaggis and State Street have agreed to the SEC’s order without denying or admitting to the regulator’s findings. The $12M that State Street will pay includes an $8M penalty and $4M in prejudgment interest and disgorgement. Meantime, DeBattis will pay over $174K in disgorgement plus prejudgment interest and a $100K penalty.
Also accused of involvement in the pay-to-play scheme is attorney Robert Crowe, who was a State Street lobbyist and fundraiser. He’s accused of getting involved in a deal with the former Ohio deputy treasure to garner business for State Street in exchange for illegal campaign funds. The Commission has also filed a complaint against Crowe.
If you suspect that you are the victim of securities fraud, contact The SSEK Partners Group today. Your first case consultation with our securities law firm is free. We represent retail investors, high net worth individuals, and institutional clients.
The SEC Order Against State Street (PDF)
The SEC Order Against DeBaggis (PDF)
The SEC Complaint Against Crowe (PDF)