State Street Sets Aside $618M For Subprime Suits

Law360 (January 3, 2008, 12:00 AM EST) -- Already the target of several subprime-related lawsuits, State Street Corp. is preparing for the worst. The bank has set aside $618 million to cover potential lawsuits stemming from subprime losses incurred by its fixed-income arm.

Boston-based State Street said on Thursday that it would take a $279 million after-tax charge in order to establish a reserve to fund the costs of anticipated litigation. In total, the reserve will hold $618 million.

“As a consequence of the unprecedented events in the credit markets over the past six...
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