State Street Corp. is nearing a deal to pay more than $500 million to end long-running investigations from federal authorities and others into allegations that the custody bank unlawfully overcharged clients on foreign currency transactions, the Wall Street Journal reported today. The settlement, which could be announced this summer, is expected to resolve claims from the U.S. Justice and Labor departments and the Securities and Exchange Commission, as well as lawsuits from clients including pension funds. The lawsuits accuse State Street of promising to execute foreign exchange trades for clients at market prices, but instead using inaccurate or fake rates that included hidden markups. The alleged overcharges occurred between 1998 and 2009, according to the lawsuits. Earlier this month, State Street said in a securities filing that it had set aside $565 million to resolve related claims. But the deal has been held up as the Justice Department and the bank work on a statement of facts that the bank will admit to.
