Religious order sues State Street, SSgA over losses

Sisters of Charity of the Blessed Virgin Mary, Dubuque, Iowa, has filed a civil suit alleging breach of fiduciary duty, breach of trust and unjust enrichment regarding losses from the order’s investment in an SSgA enhanced Dow Jones-AIG Commodities futures strategy.
APR 07, 2009
Sisters of Charity of the Blessed Virgin Mary, Dubuque, Iowa, filed a civil suit against State Street Bank and Trust and SSgA, alleging breach of fiduciary duty, breach of trust and unjust enrichment regarding losses from the order’s investment in an SSgA enhanced Dow Jones-AIG Commodities futures strategy. According to the complaint, filed in U.S. District Court in New York, the religious order’s cash collateral pool for the SSgA fund was invested in the firm’s long duration bond strategy, which was described as being conservative. The complaint alleges that in late 2006, SSgA “deviated from its stated strategy for the LBD (bond) strategy and directed assets into leveraged positions of high-risk investments, including mortgage-backed securities, exposing the strategy to enormous risk.” The complaint alleges that as of July 31, 2007, the order’s collateral pool investment was leveraged 6-to-1 and that the strategy suffered losses and underperformed its benchmark as a result of its exposure to subprime mortgages through the end of July 2007. The complaint seeks damages, recompense of fees SSgA and State Street collected on the investment, and profits the order would have made had the entities not been imprudent in their investment. Angie J. Connolly, the order’s communications director, declined to provide the size of the investment, or how much the order lost through the investment. The order hired SSgA in spring 2005 and terminated the relationship in 2007, Ms. Connolly said in an e-mail response to questions. State Street and SSgA “will vigorously defend ourselves against inappropriate claims, including those that arise from investment losses caused by market conditions,” said Arlene Roberts, a company spokeswoman.

Latest News

The 2025 InvestmentNews Awards Excellence Awardees revealed
The 2025 InvestmentNews Awards Excellence Awardees revealed

From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.

Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty
Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty

Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.

Edward Jones joins the crowd to sell more alternative investments
Edward Jones joins the crowd to sell more alternative investments

“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.

Record RIA M&A activity marks strong start to 2025
Record RIA M&A activity marks strong start to 2025

Sellers shift focus: It's not about succession anymore.

IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients
IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients

Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.