Washington State Investment Board, Olympia, will receive $11.7 million from its former master custodian, State Street Bank, in a settlement of a contract dispute over the pricing of foreign exchange transactions.
The dispute concerned foreign exchange transactions executed for the board, which oversees $53 billion in assets, by State Street between 1997 and 2007, according to the release.
James McIntire, state treasurer, said in a telephone interview that the state conducted an internal investigation of State Street following a 2009 lawsuit filed by the state of California against the firm. That lawsuit claimed State Street overcharged the $218.5 billion California Public Employees’ Retirement System, Sacramento, and the $138.6 billion California State Teachers’ Retirement System, West Sacramento, for forex transactions.
“The California lawsuit prompted our investigation,” Mr. McIntire said. Washington state did not file a lawsuit against State Street, he added.
After the internal investigation, Mr. McIntire said, State Street was prompt in settling with the state.
State Street spokeswoman Carolyn Cichon said the settlement “fully resolves a contract dispute related to the manner in which we priced some transactions during our 10-year relationship.” She declined to go into further detail.
J.P. Morgan Chase is the board’s current master custodian.