State Street Settles With SEC for $12 Million After Executive Involved in Pay-to-Play With Ohio Pension Money

State Street has agreed to a settlement with the SEC of $12 million after one of its executives, who has since been fired, was found to have been involved in a pay-to-play scheme for Ohio pension contracts.

The details of the scheme, from the Boston Globe:

An investigation by the Securities and Exchange Commission found that a former State Street executive made a deal with Ohio’s then-deputy treasurer to provide illicit cash payments and campaign contributions in exchange for business.

In return, the SEC said, the Boston-based financial services giant received contracts to handle administrative services for three public pension funds.

[…]

[Former State Street executive Vincent] DeBaggis allegedly led State Street to enter into a purported lobbying agreement with an immigration lawyer named Mohammed Noure Alo, the SEC said, who had connections to Ohio’s then-deputy treasurer, Amer Ahmad.

From February 2010 to April 2011, State Street paid $160,000 in fees to Alo, and a substantial portion of that was routed to Ahmad, the SEC said.

[…]

“Pension fund contracts cannot be obtained on the basis of illicit political contributions and improper payoffs,” said Andrew J. Ceresney, director of the SEC’s Enforcement Division, in a statement. “DeBaggis corruptly influenced the steering of pension fund custody contracts to State Street through bribes and campaign donations.”

Pension360 covered the investigation when it was in its infancy last year.

Photo by Securities and Exchange Commission via Flickr CC License