Commission Reverses ALJ Decision Exonerating Former State Street Execs

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On Monday the Commission issued an opinion reversing an administrative law judge’s initial decision finding that respondents James D. Hopkins and John P. Flannery, former employees of State Street Bank and Trust Company and its sister company, State Street Global Advisors did not violate the securities laws in connection with the offer and sale of State Street’s Limited Duration Bond Fund. The Commission voted 3-2 to find that Hopkins knowingly and Flannery negligently made material misstatements. It suspended each for one year and ordered Hopkins to pay a $65,000 penalty and Flannery to pay a $6,500 penalty. In the Matter of John P. Flannery, SEC Release No. 33-9689.