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Edward Pennings, a former State Street senior managing director
who worked in the bank's London office, entered the plea in
federal court in Boston on Monday to charges including
securities fraud and wire fraud, prosecutors said.
Pennings, a Dutch citizen who resides in the United Kingdom, was
released on a $2 million bond, according to a spokeswoman for
the U.S. Attorney's Office in Boston.
Roger Burlingame, a lawyer for Pennings, said on Tuesday that
his client voluntarily came to the United States to contest the
charges and to clear his name.
"He did not commit a crime and had absolutely no intent to do
so," Burlingame said in an email.
The arraignment followed Pennings' indictment in April with Ross
McLellan, an ex-State Street executive vice president.
State Street has faced several regulatory actions involving
allegations of overcharging clients, most recently resulting in
its July 26 announcement that it would pay $530 million to
resolve several U.S. regulatory matters and lawsuits.
State Street in 2014 reached a related settlement with the UK
Financial Conduct Authority. It paid a fine of 22.9 million
pounds, or $38 million at the time, for charging "substantial
mark-ups" to six clients, including Irish and British government
pension funds, on certain transactions.
Prosecutors said that from 2010 to 2011, McLellan, Pennings and
others conspired to add secret commissions to fixed income and
equity trades performed for the six clients.
Prosecutors said the clients were using a State Street unit that
helps institutional customers move their investments between
asset managers or liquidate large investment portfolios.
The commissions, which McLellan and Pennings took steps to hide,
came on top of fees the clients agreed to pay despite written
instructions to the bank's traders that they should not have to
do so, prosecutors said.
McLellan, a Massachusetts resident, pleaded not guilty in April.
Both men are scheduled to face trial in October 2017.
The case is U.S. v. McLellan et al, U.S. District Court,
District of Massachusetts, No. 16-cr-10094.
(This version of the story corrects to separate sixth and
seventh paragraphs)
(Reporting by Nate Raymond in New York; Editing by Dan Grebler)
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