State Street Corp. plans to close its transition management operations in London and Hong Kong by the end of the year, said spokeswoman Anne McNally.
Transition management teams in Boston, Sydney and Singapore will assume the duties handled in the London and Hong Kong offices, she said.
Ms. McNally said State Street “remains committed to the transition management business.”
In Europe, the Middle East and Asia, Ms. McNally said, “we've seen demand for these services diminish. This coupled with further moves to passive mandates, alternative assets and (liability-driven investment) mandates, as well as insourcing by large asset owners, has reduced the margins in this business.”
The shuttering of the two offices comes less than two months after the bank on Jan. 18 settled charges by the Department of Justice and the Securities and Exchange Commission that it charged secret commissions on transition management services to six clients. State Street paid $32.3 million to each agency.
In addition, in January 2011, State Street was fined £22.9 million ($36.3 million) by U.K.'s Financial Conduct Authority for the overcharging.
Separately, former State Street executives Ross McLellan, who was executive vice president, and Edward Pennings, former senior managing director, were charged April 5, 2016, with conspiracy, securities fraud and wire fraud in connection with the same scheme. They also face civil charges from the SEC. They are scheduled to go to trial before U.S. District Court Judge Leo T. Sorokin in Boston in October.
