BOSTON (Reuters) - A Boeing Co (BA.N) worker has filed a lawsuit seeking class-action status against State Street Corp (STT.N) over currency trades in the airplane maker’s $34 billion retirement plan.
State Street is accused of overcharging on forex trades made by a global index fund in the plan which is run by State Street’s own asset management arm.
The civil lawsuit, filed this week in U.S. District Court in Boston, opens a new front in the forex litigation against the Boston-based custody bank. Previous forex lawsuits against State Street have focused on trades executed for funds run by outside money managers not by State Street Global Advisors, or SSGA, the bank’s own asset management arm.
State Street’s pricing on foreign exchange trading is already the subject of U.S. government investigations, including by the Justice Department, the Department of Labor and the Securities and Exchange Commission. And pension funds in several states have sued over trades State Street performed on their behalf.
In the latest lawsuit, The Andover Companies and James Pehoushek-Stangeland, a Boeing worker in Seattle, accuse State Street of self-dealing by allowing “its currency traders to pilfer plan assets by improperly marking up and marking down foreign currency trades.”
Pehoushek-Stangeland participates in a Boeing retirement plan whose investment options include an international index fund managed by SSGA, according to the lawsuit. At the end of last year, Boeing’s retirement plan had $1.86 billion invested in the fund, or 5.5 percent of the plan’s assets.
State Street on Friday reiterated it has done nothing wrong. “As we have previously stated, State Street continues to vigorously defend the litigation that has been commenced against us regarding our indirect FX services,” the bank said.
The international index fund also appears as part of several other investment options in the Boeing investment plan. Boeing did not return messages seeking comment.
For U.S.-based workers, investments in international funds and companies are done in foreign currencies after their cash is converted to euros from dollars, for example. And when they earn dividends from an investment in a European stock, the income is converted to dollars from the foreign currency, a process called repatriation.
Reporting By Tim McLaughlin; Editing by Richard Chang