Shareholder Spotlight : State Street Scum

In Boston’s financial district the glass towers of State Street loom large – shiny façades hiding a cesspit of greed. Managing over US $4.7 trillion in assets and US $46.6 trillion in custody, the firm’s scale makes its repeated scandals all the more shocking. Below are five major episodes of misconduct – then we’ll show how this reflects on Cummins, where State Street held approximately a 4.6 percent stake (as of March 2025).

Overcharging Racket

Between 1998 and 2015, State Street defrauded its custody clients of more than US $290 million by secretly marking up out-of-pocket expenses. In May 2021 they entered a Deferred Prosecution Agreement, paying a US $115 million criminal penalty – yet kept most of the illicit gains as a ‘cost of doing business’.

Secret Commissions

In January 2017, the Department of Justice and SEC revealed State Street had been pocketing undisclosed commissions on billions of dollars in trades. They settled criminal charges for US $64 million and collateral civil fines – yet the practice spanned years of client betrayal.

Hidden Transition-Management Fees

On 7 September 2017, the SEC charged State Street with fraudulently adding secret mark-ups on transition-management services – generating roughly US $20 million in improper revenue. The firm agreed to pay US $35 million in penalties and disgorgement, all while describing it as an ‘inadvertent’ error.

Sanctions Evasion by Charles River Subsidiary

In July 2024, OFAC fined State Street’s Charles River technology arm US $7.45 million for 38 apparent violations of Russia/Ukraine sanctions – including re-dating invoices and accepting prohibited payments between 2016 and 2020.

Coal-Market Collusion Lawsuit

In November 2024, Texas Attorney General Ken Paxton sued BlackRock, State Street and Vanguard for “conspiring to rig the coal market” by using their shareholdings to force down coal output – alleging antitrust breaches under federal and state law.

The Cummins Connection

State Street holds a big piece of Cummins Inc (CMI). Cummins itself has faced major penalties:

A US $1.675 billion civil penalty under the Clean Air Act for installing defeat devices in over 630,000 Ram diesel engines, misleading regulators and the public.
Multiple class-action lawsuits alleging false ESG statements, including greenwashing, filed by Rosen Law Firm and others on behalf of investors (Class Period: 30 April 2019 – 21 December 2023).

When your major shareholder is a serial offender in overcharging, fraud, sanctions evasion and alleged market manipulation, the corporate culture of “profit over people” becomes contagious. Cummins’ diesel scandals and investor suits aren’t anomalies – they’re the logical outcome of shareholder influence.

This is capitalism unmasked – a game where the big dogs feast, the rules are optional, and the rest of us choke on the fumes. State Street’s filth stains everything it touches, and Cummins is proof the rot spreads fast.

By Lee Thompson – Founder, The Cummins Accountability Project