(Bloomberg) — State Street Corp. received a Wells notice from the U.S. Securities and Exchange Commission regarding its solicitation of asset servicing business for public pension plans.
The SEC is investigating State Street’s use of lobbyists and consultants, and in at least one instance, political contributions by a consultant during and after a public bidding process, the Boston-based firm said in a regulatory filing on Thursday. The SEC sends a Wells notice to a company or an individual after its staff has determined that sufficient wrongdoing has occurred to warrant civil claims being filed.
“Since 2012, we’ve eliminated the hiring of lobbyists and consultants for our asset servicing dealings with U.S. public retirement plans in support of our sales efforts,” said Anne McNally, a State Street spokeswoman.
Regulators in recent years have cracked down on money managers and intermediaries who use connections with public officials to win business from U.S. public pension systems. In one of the largest “pay-to-play” scandals, former New York State Comptroller Alan Hevesi spent 20 months in prison after pleading guilty to directing $250 million in pension funds to an investment firm in exchange for travel, gifts and more than $500,000 in donations. Private-equity firms including Carlyle Group, Quadrangle Group and Odyssey Investment Partners LLC agreed to pay fines to regulators to settle claims.