Compliance February 28, 2011

State Street SecLending Program Remains under Scrutiny

State Street Corp. has reported that the Securities and Exchange Commission (SEC) is continuing its investigation of the Boston-based company’s stock lending program.
Reported by

“The SEC is conducting an inquiry into the management of our securities lending program and disclosures made to … participants,” State Street said in a regulatory filing, according to the Boston Business Journal. State Street said it is cooperating with the investigation.  

The news report said that in 2008, securities finance generated $1.23 billion in revenue for StateStreet, but during the early weeks of the 2008 credit crisis, the collateral backing loaned securities fell below industry benchmarks, and when some State Street clients tried to execute redemptions, they faced restrictions.  

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Some clients filed lawsuits over the firm’s securities lending practices (see “Charges against State Street over Securities Lending Program Dismissed“).  

Last July, State Street announced a one-time $330 million cash contribution to certain common and collective trust funds managed by State Street Global Advisors (SSgA) that engage in securities lending (see “State Street Announces Sec Lending Adjustments“).
Products February 28, 2011

American Pension Services Adds to Investment Lineup

Great-West Retirement Services and John Hancock investment options will be added to American Pension Services' multiple-employer plan solution.
Reported by

American Pension Services’ Platinum 401k program already includes investment platforms from Transamerica Retirement Services and Hartford Life.

The Platinum 401k program offers clients the ability to eliminate annual plan audits, plan sponsor‐level trustee liability, annual Form 5500 filings, and through the use of Montgomery Retirement Plan Advisors, Inc., an ERISA 3(38) Investment Manager, to select and monitor investment options.

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The outsourcing of investment selection allows the plan adviser to provide services to their clients – including handling rollover funds from terminated employees – without becoming a fiduciary to the plan, the company reported.

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