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FLEECED: State Street Agrees to Pay to Resolve Fraud Charges

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In a serious blow to market and client confidence, Custodial giant State Street Corporation entered into a deferred prosecution agreement and agreed to pay a US$32.3 million criminal penalty to the U.S. Department of Justice (DOJ) to resolve charges that it engaged in a scheme to defraud a number of the bank’s clients by secretly applying commissions to billions of dollars of securities trades. State Street is a global custodian for many pensions, endowments and sovereign funds. Victims of the scheme have been fully repaid and were trading clients in Europe (Irish and U.K. government pensions), the Middle East (a sovereign wealth fund) and Africa.

“State Street engaged in a concerted effort to fleece its clients by secretly charging unwarranted commissions,” said U.S. Acting Assistant Attorney General Bitkower in a press release.

“State Street deeply regrets this matter and accepts responsibility for the actions of its former employees,” State Street said in a public statement. “The company fully reimbursed the six clients that were impacted, terminated responsible employees, appointed new executives to lead its transition management business, and implemented new and stronger controls.”

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NZ Super Names Three New Board Members

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New appointments have been made to the Board of the Guardians of New Zealand Superannuation Fund (NZ Super). The appointments were made on July 19, 2018. The three new board members are Catherine Drayton, Simon Botherway and Henk Berkman.

According to the NZ Super press release, “Simon Botherway’s appointment runs from 1 August 2018 to 30 September 2021. He is a professional director with a history in investment, investment regulation and supervision. Other board roles have included his current position as Chair of Serko, a director on Callaghan Innovation and previously being the Chair of the FMA Establishment Board and a member of the Securities Commission.

Henk Berkman will serve from 1 October 2018 to 30 September 2022. He has been Professor of Finance, Department of Accounting and Finance at the University of Auckland since 2008. Mr Berkman has held previous professorial positions at Massey University, University of Sydney and the University of Maastricht.

Catherine Drayton will serve from 1 November 2018 until 30 September 2022. She is a Christchurch-based director who previously led the Assurance and Advisory Practice for PwC in Central Eastern Europe. Her public sector governance experience includes her current role as Chair of Christchurch International Airport and as a member of the University of Canterbury Council. Her experience as a Director of Ngai Tahu Holdings has provided her with iwi governance experience.”

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AIMCo Names Former Talisman Energy Executive to Board

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The Alberta Investment Management Corporation (AIMCo) appointed Jacqueline (Jackie) Sheppard as a member of the board of directors for a term set to expire on June 30, 2021. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Grant & Eisenhofer Reveals Fortis Investors to Receive $1.5 Billion in Mega Settlement

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Law firm Grant & Eisenhofer won a landmark case for its clients after a seven-year legal duel in Dutch courts. On July 13, 2018, the Amsterdam Court of Appeals officially approved the largest securities settlement ever reached in Europe, paving a path for international insurance company Ageas N.V./S.A. to begin payment of US$ 1.5 billion (€1.3 billion) to multiple groups of institutional and individual investors from Europe and the United States. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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