Northern Trust receives SEC subpoena
30 April 2014 London
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Northern Trust has received a subpoena from the US Securities and Exchange Commission (SEC), seeking documents related to the bank’s securities lending activities, according to its latest 10Q filing.
A spokesperson from Northern Trust commented: “We believe the securities lending practices under review are appropriate. We will fully cooperate with the SEC to facilitate its review.”
Although it is unclear whether the subpoena is related, a number of participants in Northern Trust’s securities lending programme have commenced either individual lawsuits or purported class actions in which they claim, among other things, that the bank failed to exercise prudence in the investment management of the collateral received from the borrowers of the securities.
The cases assert various contractual, statutory and common law claims, including claims for breach of fiduciary duty under common law and under the Employee Retirement Income Security Act (ERISA).
Northern Trust has already settled lawsuits over securities lending, with multiple plaintiffs agreeing to withdraw claims.
Meanwhile, Northern Trust’s securities lending revenue increased 2 percent in Q1 2014, primarily reflecting higher volumes in the current quarter, according to its most recent financial report.
A spokesperson from Northern Trust commented: “We believe the securities lending practices under review are appropriate. We will fully cooperate with the SEC to facilitate its review.”
Although it is unclear whether the subpoena is related, a number of participants in Northern Trust’s securities lending programme have commenced either individual lawsuits or purported class actions in which they claim, among other things, that the bank failed to exercise prudence in the investment management of the collateral received from the borrowers of the securities.
The cases assert various contractual, statutory and common law claims, including claims for breach of fiduciary duty under common law and under the Employee Retirement Income Security Act (ERISA).
Northern Trust has already settled lawsuits over securities lending, with multiple plaintiffs agreeing to withdraw claims.
Meanwhile, Northern Trust’s securities lending revenue increased 2 percent in Q1 2014, primarily reflecting higher volumes in the current quarter, according to its most recent financial report.
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