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(PRWEB) March 01, 2012
Leading national securities law firm Gilman Law LLP announces that State Street Global Advisors (“SSgA”) was fined $5 million dollars by the Massachusetts Securities Division for failure to disclose to its Carina CDO Ltd. investors that the Magnetar Capital LLC hedge fund (“Magnetar”) played a role in structuring the collateralized debt obligation (“CDO”). (In The Matter of: State Street Global Advisors, Docket No.: 2011-0023). A CDO is a type of structured finance product that purchases and pools various debt instruments into a single fund in an attempt to reduce investor exposure to one asset through diversification.
The Consent Order states that on or around June 7, 2006, SSGA agreed to act as the Investment Manager of the $1.56 billion hybrid CDO named Carina CDO, Ltd. (“Carina”). As the Investment Manager of Carina, SSgA was responsible for the selection, acquisition and sale of collateral assets for the CDO. SSgA also participated in marketing the CDO, taking part in investor meetings and relying on Carina’s marketing materials. By failing to disclose material information relating to Magnetar’s involvement in the Carina CDO transaction, the marketing materials omitted information that rendered them materially false and misleading. The Settlement reached in the State Street Global Advisors Fine faults SSgA for not informing Carina CDO investors of Magnetar’s role in creating Carina and its bets against CDOs.
Specifically, the Consent Order states that SSgA violated the Massachusetts Uniform Securities Act by failing to disclose the following: (1) Magnetar initiated discussions with Deutsche Bank about the creation of Carina; (2) Magnetar was committed to being the equity investor in Carina from the inception of planning the CDO; (3) Magnetar recommended certain assets for inclusion in Carina in discussions with SSgA and Deutsche Bank during the ramp-up process for the CDO; (4) During the ramping process, SSgA had become aware that Magnetar attempted to take a short position in certain assets selected for Carina by SSgA; and (5) Because this information was not conveyed in the marketing materials, investors were unaware of a potential conflict of interest arising from Magnetar’s involvement in the CDO.
If you purchased the Carina CDO securities between January 1, 2006 and November 30, 2007, you may contact Gilman Law LLP to discuss your rights, including as to recovery of your losses or to obtain additional information. Please review the State Street Global Advisors Fine Article on the Gilman Law Securities Fraud Website or contact Gilman Law LLP at (888) 252-0042.
About Gilman Law LLP:
The securities fraud lawyers at Gilman Law have over 32 years of experience litigating securities and other types of class action cases, and have been involved in all major aspects of securities litigation. Gilman Law specializes in cases involving stock manipulation, securities fraud, investments fraud, shareholder rights violations, and securities arbitration. For a free evaluation of your case or to obtain additional information, please visit the Gilman Law Securities Fraud Website or call TOLL FREE (888) 252-0048.