Let’s rewind a bit, shall we? Last time we dragged you through the festering underbelly of State Street Corporation, that gleaming Boston behemoth with its $4.7 trillion in assets under management and a staggering $46.6 trillion in custody – numbers so obscene they make your eyes water. We laid bare five gut-punching scandals: the overcharging racket from 1998 to 2015 that fleeced clients out of $290 million before they coughed up a measly $115 million in a deferred prosecution deal; the secret commissions skimmed off billions in trades, settled for $64 million like it was pocket change; those hidden transition-management fees raking in $20 million illicitly, brushed off as an “inadvertent” cock-up with a $35 million slap on the wrist; the Charles River subsidiary’s sanctions evasion fining them $7.45 million for dodgy dealings with Russia and Ukraine; and that fresh-as-hell November 2024 lawsuit from Texas AG Ken Paxton accusing them, alongside BlackRock and Vanguard, of colluding to rig the coal market and kneecap output through their shareholdings. All of it tying back to their fat 4.6 per cent stake in Cummins Inc. as of March 2025 – a position that’s since bloated to about 4.7 per cent by July, according to the latest filings, making them one of the top institutional holders in a company already drowning in its own diesel emissions scandals and greenwashing lawsuits. It’s no coincidence, this shareholder stranglehold; it’s the grease that keeps the whole rotten machine turning, whispering sweet nothings about profit margins while the planet chokes and investors get bent over.

But oh, we’re not done. Not by a long shot. State Street’s rap sheet is longer than a junkie’s arm, etched with the kind of betrayals that make you want to smash your screen. This is part two, and it’s uglier, angrier, because why the fuck should we play nice when these pricks treat ethics like a bad joke? They’ve got their fingers in every pie – pension funds, subprime gambles, pay gaps wider than the Grand fucking Canyon – and every time they get caught, it’s a settlement, a fine, a wink and a nudge, while the C-suite clinks champagne glasses. And Cummins? That 4.7 per cent chunk isn’t just shares; it’s influence, a seat at the table where decisions get made that prioritise quarterly earnings over, say, not poisoning the air we breathe. Is this the ethical ecosystem Cummins wants to swim in? One where “alternative ideas on behaviour” mean screwing over retirees, discriminating like it’s 1950, and hiding risks behind smoke and mirrors? You tell me.

The Pay-to-Play Hustle: Buying Influence with Other People’s Money

Picture this: it’s 2016, and State Street’s Vincent DeBaggis, the smug bastard heading up the public funds group, decides the best way to lock in juicy advisory contracts from New York pension funds is to play dirty politics. We’re talking improper contributions funneled through a lobbyist to candidates for state comptroller – all to grease the wheels for millions in business. The SEC didn’t take kindly to it, charging the firm with pay-to-play violations that spat in the face of rules meant to keep public money clean. They settled for $12 million – $4 million disgorged profits plus an $8 million penalty – without admitting a damn thing, of course. DeBaggis? Barred from the industry and hit with his own $100,000 fine. But here’s the kicker: this wasn’t some rogue operator; it was State Street’s playbook, treating taxpayer-funded pensions like a slot machine you rig from the inside. And while they’re at it, bleeding dry the very funds meant to secure old folks’ retirements, they’re preaching fiduciary duty from their glass towers. What a load of bollocks. If this is how they court clients, imagine what they do once they’ve got the gig.

Pay Gaps and Hypocrisy: The Fearless Girl Who Wasn’t So Fearless

Fast-forward to 2017, and State Street pulls out all the stops for PR gold: they plonk down the “Fearless Girl” statue opposite Wall Street’s Charging Bull, a bronze middle finger to gender inequality, or so they claim. Months later, the U.S. Department of Labor drops a bomb: the firm systematically underpaid hundreds of female and Black executives compared to their white male peers in equivalent roles – over 300 employees shortchanged in a web of discrimination that reeks of the old boys’ club. They settled for $5 million in back pay and interest, no admission of guilt, naturally. But wait, there’s more outrage to come. In July 2024, the DOL circles back with another probe, alleging ongoing gender-based pay disparities, forcing State Street to allocate $4.2 million for future equity adjustments. Again, no mea culpa, just cash thrown at the problem like it’s a hangover cure.

This isn’t incompetence; it’s institutionalised arseholery. While they’re virtue-signalling with statues and diversity reports, their ledgers tell the real story: women and minorities earning less for the same sweat. It’s the kind of two-faced shit that makes your blood boil – especially when they’re major shareholders in outfits like Cummins, where ESG claims ring as hollow as their own pay equity promises. Does Cummins fancy being tainted by this discriminatory sludge? Or is it just business as usual in State Street’s ethical wasteland?

FX Fraud: Robbing Retirees Blind in the Trading Pit

Go back to 2009, when California’s Attorney General Jerry Brown – no slouch when it comes to calling out corporate crooks – sues State Street for a brazen FX trading scam that hammered CalPERS and CalSTRS, the golden geese of public pensions. From 2001 to 2008, State Street’s traders manipulated exchange rates, timing deals to skim hidden fees – up to $10 million a year, totalling over $56 million from these two funds alone. They entered bogus rates into electronic systems to cover their tracks, defrauding the very people whose futures they were supposed to safeguard. The suit settled in 2012 for $60 million as part of a larger $530 million pot for FX victims, but no one’s in cuffs, no real reckoning.

This was predation, pure and simple – feasting on public servants’ nest eggs while the execs pocketed bonuses. It’s the same predatory instinct that sees them holding 4.7 per cent of Cummins, a company already slapped with $1.675 billion for defeat devices in Ram engines. Coincidence? Or just another thread in the web where shareholder pressure twists arms towards shortcuts and cover-ups? State Street’s “alternative ethics” seem to thrive on screwing the little guy, and Cummins risks getting dragged into that mire.

The Magnetar Mess: Toxic CDOs and Hidden Short Bets

2012 rolls around, and Massachusetts regulators finally grow a pair, fining State Street Global Advisors $5 million – $3.5 million disgorged plus a $1.5 million penalty – for peddling a $1.65 billion CDO called Carina without spilling the beans on the elephant in the room. That elephant? Magnetar Capital, the hedge fund holding the equity tranche while massively shorting the underlying assets, betting the whole house of cards would collapse. Which it did, spectacularly, in the subprime shitstorm. Investors got fed rosy marketing materials omitting this suicidal setup, left holding the bag when it all went tits up.

State Street didn’t admit wrongdoing, but the stench of complicity hung heavy. This wasn’t oversight; it was active deception, profiting from the apocalypse they helped architect. Tie this to their Cummins stake, and you see the pattern: opacity as a business model, where risks are buried and shareholders like them push for the quick buck over the straight path. Is Cummins’s board blind to how this “ecosystem” normalises lying to investors?

Pension Peril: The Bristol-Myers Squibb Debacle

Cut to September 2024, and the knives are out again in a class-action ERISA suit – Doherty v. Bristol-Myers Squibb – targeting State Street Global Advisors Trust Co. as the so-called independent fiduciary for a $2.6 billion pension risk transfer to Athene Holding back in 2019. Retirees claim State Street botched the due diligence, picking a private equity-backed insurer riddled with leverage risks that could leave pensions high and dry in a downturn. No proper vetting of alternatives, no disclosure of the fees they skimmed (millions, naturally), just a rushed offload of liabilities onto vulnerable plan participants. The case is grinding through the Southern District of New York as of now, with amicus briefs from industry hacks defending the PRT market like it’s sacred ground.

This is fiduciary failure on steroids – betraying the trust of Bristol-Myers workers who’ve toiled decades for a secure dotage. State Street’s role? Gatekeeper turned grifter. And with their claws in Cummins to the tune of 4.7 per cent, one has to wonder: are they whispering similar shortcuts into that boardroom, prioritising cost-cutting over care? Their “alternative behavioural ideas” look a lot like gambling with other people’s retirements.

China Risks Downplayed: Geopolitical Roulette for Profits

February 2025, and a posse of 17 Republican state AGs – led by Oklahoma’s Gentner Drummond – fire off letters to State Street and kin, grilling them over China-focused funds that allegedly whitewash the dangers. Disclosures compared CCP ties and Taiwan tensions to quaint U.S. state spats, omitting the full horror of investing in a U.S.-designated adversary primed for invasion. Fiduciary duty? Breached, say the AGs, with threats of securities law hammerings if responses don’t satisfy.

No fines yet, but the probe’s a powder keg. State Street’s playing fast and loose with investors’ cash in a tinderbox region, all for yield. Link this to Cummins’s global supply chains, and their shareholder heft could drag it into the crossfire – undisclosed risks bubbling up like bad karma. Ethical ecosystem? More like a minefield where “alternative ideas” mean betting blind on dictators.

Execs in the Dock: When the Suits Finally Face the Music

Don’t think the top dogs skate free forever. In the wake of those 2017 secret commissions, former EVP Ross McLellan got his comeuppance in June 2018: convicted of wire fraud and securities fraud for masterminding the concealment of $3.7 million in illicit trading markups from 2009 to 2014. Sentenced to 18 months in the slammer plus $1.2 million restitution in October. His underlings, VP Edward Pennings and director Richard Boomgaardt, copped pleas – Pennings six months inside, Boomgaardt probation. Parallel SEC charges barred McLellan from the biz.

It’s rare justice in this cesspool, but it exposes the rot: a culture where execs greenlight fraud, then scatter like rats. Meanwhile, the firm pays fines and carries on. For Cummins shareholders, this is the vibe their 4.7 per cent overlord brings – a reminder that in State Street’s world, accountability stops at the prison gate.

Subprime Lies and Securities Lending Scams: The Hits Keep Coming

We can’t gloss over the 2010 SEC charges for misleading punters on subprime exposure in their Limited Duration Coverage Bond Fund – settling for $50 million penalty plus $8.3 million disgorgement after the fund imploded in the crisis. Or the 2019 Massachusetts probe into overcharging on securities lending fees from 1996 to 2013, netting $54 million in restitution and penalties. These aren’t footnotes; they’re chapters in a saga of deception, where clients get fed bullshit while profits soar.

State Street’s empire is a house of cards built on lies, and their grip on Cummins – that hefty 4.7 per cent – begs the question: is this the ethical north star Cummins needs? Or just another cog in a machine that views rules as suggestions and people as marks? The decay spreads, fellas, and until someone torches the lot, we’ll keep choking on the fumes.

By Lee Thompson – Founder, The Cummins Accountability Project

Shareholder Spotlight : Another Walk Down State Street (Part 2)