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SEC Charges Former State Street Employees for Misleading Investors in Limited Duration Bond Fund

The Doss Firm

On September 30th, the SEC announced that it charged two former State Street Bank and Trust Company employees, John P. Flannery and James H. Hopkins, with misleading investors about their exposure to sub-prime investments.

The SEC alleged that Flannery and Hopkins marketed State Street’s Limited Duration Bond Fund as an “enhanced cash” investment strategy that was an alternative to a money market fund. In truth, however, by 2007, the fund was almost entirely invested in sub-prime residential mortgage backed securities and derivatives.

Earlier this year, the SEC charged State Street in a related case and the firm settled the charges for more than $300 million.

If you have lost money in the State Street Limited Duration Bond Fund or any other investment that was marketed as a money market alternative, please contact us for a free consultation.

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