On June 27, 2019, the SEC charged State Street Bank and Trust Company with overcharging mutual funds and other registered investment company clients for expenses related to the firm’s custody of client assets. The overcharges included a secret markup that State Street tacked on to the cost of sending secured financial messages through the Society of Worldwide Interbank Financial Telecommunication (SWIFT) network. As described in the order, State Street’s clients agreed to pay the firm back for out-of-pocket custodial expenses that the firm paid on the clients’ behalf. Instead of charging clients for the actual amount of the expenses, however, the SEC order finds that State Street routinely overbilled its clients. According to the SEC’s order, from 1998 to 2015, State Street collected $170 million from the overcharges, with $110 million coming from the hidden SWIFT markup charged to thousands of its registered investment company clients. Subsequently, State Street has been and undertakes to continue reimbursing these overcharges, with interest, to affected clients. The SEC’s order finds that State Street violated Section 34(b) of the Investment Company Act of 1940 and caused violations of Section 31(a) of the Investment Company Act and Rules 31a-1(a) and 31a-1(b) thereunder. Without admitting or denying the SEC’s findings, State Street agreed to cease and desist from committing or causing any future violations of these provisions, to pay disgorgement and prejudgment interest of $48.78 million, which State Street has been returning directly to the affected registered investment companies, and to pay a civil penalty of $40 million.