State Street bank fined €27.9m

The National Treasury Management Agency (NTMA) has been named as one of six firms that were deliberately overcharged by State Street bank, according to Britain’s financial watchdog.

The Financial Conduct Authority (FCA) said the bank acted with “complete disregard” for the interests of its customers as it imposed a £22.9 million (€27.9m) penalty for failings in its transition management business.

The bank secured a 30% reduction on the fine by agreeing to settle early.

A spokesperson for the NTMA said they had noted the fine and they had previously been repaid €3.2m as reimbursement for being overcharged for transition management services by State Street Bank Europe.

“The NTMA stated some time ago that it would await the outcome of the FCA investigation to decide what further action it might take with State Street.

The NTMA is studying the Final Notice published by the FCA today and will report to the NPRF Commission very shortly,” the spokesperson said.

In 2012 the CEO of the NTMA, John Corrigan, told the Oireachtas Public Accounts Committee that the NTMA has reported the issue to the Garda and the Financial Services Authority in Britain, which regulates State Street. He added that the company would argue that there was no fraud involved.

The FCA said that they only began their investigation after a State Street client reported the issue to them.

“Overcharging only came to light after a client notified staff that it had identified mark-ups on certain trades that had not been agreed. Those responsible then incorrectly claimed both to the client and later to State Street UK’s compliance department that the charging was an inadvertent error, and arranged for a substantial rebate to be paid on that false basis,” the FCA said in its statement.

State Street said in a statement it deeply regretted the failings and had worked hard to enhance its controls over the past few years. The firm also dismissed staff in 2011 who were centrally involved in the overcharging.

State Street employs more than 2,000 people in Ireland based in Dublin, Dundalk, Kilkenny and Naas.

None of the Irish staff are implicated in the fraud which occurred in the London office.