01 June 2018

Boston Judge wants State Street counsel to testify in fraud trial

Three State Street attorneys now based in Europe are asked by judge to testify to avoid appeal grounds

A federal judge in Massachusetts on Tuesday implored three former State Street attorneys in Europe to testify voluntarily at a fraud trial next week of a former executive at the bank holding company.

Avoiding appeal
At a pretrial hearing in Boston, US District Judge Leo T. Sorokin requested that former three State Street lawyers submit to questioning. They are Sarah Lewis, who specialises in derivatives and joined the Clifford Chance Amsterdam practice in 2013, onetime in-house counsel Krystyna Beck, now a regulatory specialist at BNP Paribas, and, Simone Paul, now global head of Investigations at HSBC Global Banking and Markets. The judge is seeking to avoid questions arising about the trial's fairness that could give grounds for appeal. The requests go back to last January, when a former State Street Global Markets LLC executive’s motion to depose Ms Lewis before his trial on securities fraud charges was accepted, with the judge agreeing with the executive that the attorney’s testimony could swing his defense. Judge Sorokin said he was granting defendant and former State Street executive Ross McLellan’s motion to take a Rule 15 deposition of Clifford Chance associate Sarah Lewis, accepting there were ‘exceptional circumstances.’

U.S. prosecutors brought charges against the former executive alleging he participated in a scheme to defraud six clients in Europe and the Middle East by charging them secret commissions on billions of dollars of trades. In February, a new allegation was added that Mr McLellan with others sought to defraud an unnamed New York-based insurance company by applying hidden fees to fixed income trades conducted for funds advised by the insurer. The indictment said that as a result of McLellan’s action, State Street overcharged the insurers and the funds it advised by about $700,000.