State Street Shakes 401(k) Plan’s Claims But CitiStreet Still Faces Potential Liability

State Street Bank and Trust Co. and State Street Global Advisors persuaded the U.S. District Court for the Southern District of New York Aug. 12 to dismiss the two companies from claims that they breached their fiduciary duties by misrepresenting the investment strategy behind their “Yield Plus Fund” (YPF) (F.W. Webb Co. v. State Street Bank & Trust Co.).

Granting the two State Street companies’ motion to dismiss, Judge Richard J. Holwell found that the companies did not qualify as Employee Retirement Income Security Act fiduciaries.

The court found that while the State Street companies had the ability ...