Arkansas Teacher Retirement System will receive a percentage of a $300 million class-action settlement it reached last week with its custodial bank in connection with overcharging fees.
ATRS is waiting on a U.S. District Court judge in Massachusetts to approve a formula to distribute the settlement money to class members, George Hopkins, executive director of ATRS, told Arkansas Business Monday. Hopkins said it was unclear how many class members there might be.
ATRS was the lead plaintiff in the case against State Street Corp. of Boston that was filed in 2011 in U.S. District Court in Massachusetts.
ATRS alleged that State Street and some of its subsidiaries misled members of the class in connection with certain foreign currency exchange trades.
"We thought the fees were outside the market that we should have been charged for repatriation of dividends," Hopkins said.
He said it was difficult to determine how much ATRS was overcharged. "It was not some massive amount, but it was an amount we feel like a custodial bank should not charge."
U.S. District Court Judge Mark L. Wolf has to approve the distribution formula, which could take two to three months.
Hopkins said ATRS started looking into the fees in 2010 after hearing news reports that retirement systems in other states questioned the fees with large custodial banks across the country.
The ATRS board agreed to file a class action lawsuit against State Street to recover those funds, Hopkins said. Labation Sucharow LLP of New York was the lead attorney in the case.
The lawsuit hasn't ruined ATRS' relationship with State Street.
"We continue to have a good working relationship with State Street, although we objected to those fees," he said. "We're glad that case is settled, and we're putting that behind us and moving forward."