William Hunt, the president and chief executive of State Street Global Advisors (SSGA), has resigned, as the hedge fund’s Boston-based parent company announced it would take a $279 million pre-tax charge for costs stemming from US subprime mortgages.State Street said it would search both internally and externally for a new chief executive of SSGA. For now, Hunt will be replaced by James Phalen, who is State Street’s head of international operations for investment servicing, research and trading. He takes over as interim president and chief executive, reporting to State Street’s chairman and chief executive, Ronald Logue.
State Street said it was using the $279 million fourth-quarter pre-tax charge to address legal and other costs arising from the underperformance of some of SSGA’s actively managed fixed-income strategies.
“We have reviewed the actively managed fixed-income strategies at SSGA that contained investments backed by subprime mortgages,” said Logue. “Based on our review and discussions with certain customers who were invested in these strategies, we have established this reserve to address legal exposure and other related costs.”
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