Following Whistleblower Suit: State Street Sued by Arkansas Teacher Retirement System for Deceptive Practices

The State Street Corporation of Boston, one of the largest custodial banks has been sued in the Federal District Court in Boston for overcharging clients on currency transactions. This case falls on the heels of a report of investigations by state attorneys general in four states aided by whistleblowers that tens of millions of dollars are being overcharged to public pension funds in the U.S. The whistleblowers are using Delaware shell companies to remain anonymous but one report identified a whistleblower as Harry Markopoulos, the Boston-based investor who warned regulators for years about Bernard Madoff. The Arkansas Teacher Retirement System says that State Street failed to give clients the best prices on foreign exchange rates and that this deceptive practice generated as much as $500 million in profits annually for the bank.