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Pawar Law Group Announces the Filing of a Securities Class Action Lawsuit Against State Street Corporation - STT
By AccessWire, February 07, 2017, 01:25:00 PM EDT
NEW YORK, NY / ACCESSWIRE / February 7, 2017 /The Pawar Law Group announces a class action lawsuit on behalf of State Street Corporation. ("State Street" or the "Company") (NYSE:STT) investors who purchased State Street stock between February 27, 2012 and January 18, 2017, inclusive (the "Class Period"). The suit is for recovery of investor losses.
To participate in this class action lawsuit, visit the firm's website at http://pawarlawgroup.com/cases/state-street-corporation/ or email Vik Pawar, Esq. at firstname.lastname@example.org or call toll free at (866) 999-0873.
No class has been certified in the above action yet. Until certification occurs, you are not represented by an attorney. You may choose to take no action and remain a passive class member.
According to the lawsuit, throughout the Class Period Defendants made false and/or misleading statements and/or failed to disclose that: (1) State Street engaged in a scheme to defraud a number of its clients by secretly applying commissions to billions of dollars of securities trades; (2) State Street's billing practices relied on unsustainable methodologies; (3) over a 18-year period, approximately $240 million or more of expenses may have been incorrectly invoiced to State Street's asset servicing clients; (4) from June 2010 until September 2011, State Street charged clients "substantial" mark-ups without their consent; and (5) as a result, Defendants' public statements were materially false and misleading at all relevant times. When the true details entered the market, the lawsuit claims that investors suffered damages.
If you wish to serve as lead plaintiff, you must move the Court no later than March 28, 2017. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You may join the case here: http://pawarlawgroup.com/cases/state-street-corporation/ or email Vik Pawar, Esq. at email@example.com
Vik Pawar, Esq.Pawar Law Group 20 Vesey Street, Suite 1210 New York, NY 10007 Tel: (212) 571-0805 Fax: (212) 571-0938 firstname.lastname@example.org
SOURCE:Pawar Law Group
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File No. 3-17720
SEC Finalizes Settlement with State Street For Misleading Clients About Prices for Foreign Currency Exchange Trades
December 12, 2016 – The Securities and Exchange Commission today announced a final settlement with State Street Bank and Trust Company as part of an overall agreement announced on July 26, 2016 with other federal regulators. As previously announced, State Street has agreed to pay a total of $382.4 million to the SEC, the Department of Justice, and the Department of Labor for misleading mutual funds and other custody clients by applying hidden markups to foreign currency exchange trades.
According to the SEC’s order instituting a settled administrative proceeding against State Street, as part of its custody bank line of business, State Street safeguards clients’ financial assets and offers such services as indirect foreign currency exchange trading (Indirect FX) for clients to buy and sell foreign currencies as needed to settle their transactions involving foreign securities. State Street realized substantial revenues by misleading custody clients about Indirect FX, telling some clients that it guaranteed the most competitive rates available on their foreign currency exchange trades, provided “best execution,” or charged “market rates” on the transactions. State Street instead set prices largely driven by predetermined, uniform markups and made no effort to obtain the best possible prices for these clients.
The SEC’s order, in which State Street admitted certain facts, finds that State Street willfully violated Section 34(b) of the Investment Company Act of 1940 and caused violations of Section 31(a) of the Investment Company Act and Rule 31a-1(b) by providing its registered investment company custody clients with trade confirmations and monthly transaction reports that were materially misleading in light of the representations it made about how it priced foreign currency exchange transactions. The SEC’s order requires State Street to pay $75 million in disgorgement plus $17.4 million in interest to harmed clients as well as a $75 million penalty.
In addition to the disgorgement and penalty in the SEC order, State Street agreed to pay a $155 million penalty to the Department of Justice and at least $60 million in settlement of claims brought by the Department of Labor.
The SEC’s investigation was conducted by Sue Curtin, Cynthia Storer Baran, Andrew Palid, Deena Bernstein and Celia Moore of the Boston Regional Office, and Stuart Jackson of the Division of Economic and Risk Analysis. The SEC appreciates the assistance of the U.S. Attorney’s Office for the District of Massachusetts and the Department of Labor.
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Hill v. State Street Corporation
Master Docket No. 1:09-cv-12146-GAO
Welcome to the settlement website for the Hill v. State Street Corporation class action litigation (the “Action”).
Lead Plaintiffs, Public Employees’ Retirement System of Mississippi and Union Asset Management Holding AG (collectively, “Lead Plaintiffs”), on behalf of themselves and the Settlement Class (defined below), reached a settlement of the Action for $60,000,000 in cash (the “Settlement”) that resolves all claims in the Action.
A Settlement Hearing was held on November 20, 2014 to determine, among other things, whether the Settlement should be approved. On November 26, 2014, Magistrate Judge Judith Gail Dein entered a Report and Recommendation recommending approval of the Settlement, the Plan of Allocation and Co-Lead Counsel’s motion for attorneys’ fees and expenses. On January 8, 2015, Federal District Judge George A. O’Toole, Jr. entered an Order Adopting Magistrate Judge Dein’s Report and Recommendation, a Final Judgment approving the Settlement, an order approving the Plan of Allocation, and an order awarding attorneys’ fees and expenses.
If you are a member of the Settlement Class, your rights will be affected and, if you filed a claim form, you may be eligible for a payment from the Settlement. The Settlement Class consists of:
All persons and entities who or which purchased or otherwise acquired publicly traded common stock of State Street Corporation (“State Street”), during the period from October 17, 2006 through October 21, 2009, inclusive (the “Settlement Class Period”), including all persons and entities who or which purchased or otherwise acquired State Street common stock pursuant and/or traceable to a registered public offering conducted on or about June 3, 2008, and who were damaged thereby.
Certain persons and entities are excluded from the Settlement Class by definition as set forth in the Settlement Notice. Please read the Settlement Notice to fully understand the effect of the Settlement on Settlement Class Members.
Continued on StateStreetClassActionSettlement.com
Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASE
Tuesday, July 26, 2016
State Street Bank to Pay $382 Million to Settle Allegations of Fraudulent Foreign Currency Exchange Practices
U.S. Attorney Carmen M. Ortiz for the District of Massachusetts, Director Andrew J. Ceresney of the Division of Enforcement for the Securities and Exchange Commission (SEC) and Secretary Thomas E. Perez of the U.S. Department of Labor (DOL), announced today that State Street Bank and Trust Company, a Massachusetts-based financial institution, agreed to pay a total of at least $382.4 million, including $155 million to the Department of Justice, $167.4 million in disgorgement and penalties to the SEC and at least $60 million to ERISA plan clients in an agreement with the DOL, to settle allegations that it deceived some of its custody clients when providing them with indirect foreign currency exchange (FX) services.
As part of the settlement with the Department of Justice, State Street admitted that contrary to its representations to certain custody clients, its State Street Global Markets division (SSGM) generally did not price FX transactions at prevailing interbank market rates. Instead, State Street admitted that SSGM executed FX transactions by applying a predetermined, uniform mark-up (if the custody client was a FX purchaser) or mark-down (if the custody client was an FX seller) to the prevailing interbank rate for FX. State Street is also alleged to have falsely informed custody clients that it provided “best execution” on FX transactions, that it guaranteed the most competitive rates available on FX transactions and that it priced FX transactions based on a variety of factors when, in fact, prices were largely driven by hidden mark-ups designed to maximize State Street’s profits.
“State Street’s custody clients, many of whom were public pension funds, financial institutions and non-profit organizations, had a right to expect that State Street would execute transactions in an honest and forthright manner,” said U.S. Attorney Ortiz. “Instead, State Street executed FX transactions in a manner that enabled it to reap substantial profits at the expense of its custody clients. Today’s settlement reflects a significant and appropriate penalty for State Street’s deceptive conduct.”
“State Street misled custody clients about how it priced their trades and tucked its hidden markups into a corner where they were unlikely to notice,” said Director Ceresney. “Financial institutions cannot mislead their customers about their trading costs.”
“When financial institutions charged with safeguarding retirement plan assets put the firm’s interests ahead of the best interest of their plan clients, or fail to candidly disclose fees, we will hold them accountable,” Secretary Perez. “Retirement security is a pillar of middle class life, and the Labor Department and our federal partners are committed to using our authority to protect it.”
Pursuant to the proposed settlements and other agreements, State Street will pay a total of $382.4 million, of which $155 million will be paid as a civil penalty to the United States to resolve the allegations made by the Department of Justice that State Street violated the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA), by committing fraud affecting financial institutions. The United States’ investigation arose from whistleblowers who filed a declaration pursuant to FIRREA.
The SEC has approved a separate agreement to settle the SEC’s investigation concerning State Street’s indirect FX services. Under the terms of the agreement, the Commission will enter an administrative order against State Street, only after the U.S. District Court gives final approval to State Street’s proposed settlement with private plaintiffs in pending securities class action lawsuits concerning its indirect FX pricing service. The administrative order will find that State Street violated Section 34(b) of the Investment Company Act of 1940 (Investment Company Act) and caused violations of Section 31(a) of the Investment Company Act and Rule 31a-1(b) thereunder, by providing its registered investment company (RIC) clients with trade confirmations and monthly transaction reports that were materially misleading in light of State Street’s representations about how it priced FX transactions. Under the terms of the order, State Street will be required to disgorge $75 million in ill-gotten gains and $17.4 million in prejudgment interest, to be paid to RIC clients, and also pay the SEC a civil penalty of $75 million.
State Street is simultaneously resolving DOL’s claims under the Employee Retirement Income Security Act (ERISA) by agreeing to pay at least $60 million to State Street’s ERISA plan customers who, DOL found, sustained losses in connection with the conduct alleged above. This amount will be distributed to ERISA plan customers in conjunction with the settlement of certain private class action lawsuits. DOL alleges in the settlement that State Street made false or misleading representations concerning certain FX trades, and concealed from its plan customers how it priced those trades. In the settlement State Street represents that it now makes and will continue to make detailed disclosures to its customers with respect to its FX pricing and that it now refrains and will continue to refrain from making representations regarding its FX pricing that are not accurate.
State Street will pay an additional $147.6 to resolve private class action lawsuits filed by the bank’s customers alleging similar misconduct.
The case was handled by Assistant U.S. Attorneys Justin O’Connell and Abraham George of Ortiz’s Civil Division. The SEC’s investigation was conducted by Senior Enforcement Counsels Sue Curtin, Cynthia Storer Baran and Andrew Palid, Senior Trial Counsel Deena Bernstein and Assistant Regional Director Celia Moore, all of the Boston Regional SEC Office and Stuart Jackson of the Division of Economic and Risk Analysis. The DOL’s case was investigated by the Employee Benefits Security Administration’s Boston Regional Office with assistance from Senior Trial Attorneys Suzanne Reilly, Nathan Goldstein and Nathan Henderson, and ERISA Counsel Marjorie Butler.
State Street To Pay $530M In Foreign Exchange Fee Deal
By Evan Weinberger and Kat Greene
Law360, New York (July 26, 2016, 8:37 PM EDT) -- State Street Corp. said Tuesday it would pay $530 million to resolve federal and proposed class claims that it overcharged customers on foreign exchange transactions, resolving a long-running investigation into those practices.
The settlement wraps up allegations by U.S. regulators that State Street improperly allowed traders to mark up and mark down foreign currency trades in a way that benefited the Boston-based custody bank's bottom line to the detriment of investors. (Credit: AP)
The settlement with the U.S. Department of Justice, the U.S. Department of Labor, the U.S. Securities Exchange Commission and the Massachusetts attorney general wraps up allegations by the regulators that State Street improperly allowed traders to mark up and mark down foreign currency trades in a way that benefited the Boston-based custody bank’s bottom line to the detriment of investors.
“State Street misled custody clients about how it priced their trades and tucked its hidden markups into a corner where they were unlikely to notice,” Andrew J. Ceresney, Director of the SEC’s Division of Enforcement, said in a statement Tuesday. “Financial institutions cannot mislead their customers about their trading costs.”
State Street also faced lawsuits from pension funds alleging that the bank’s practices and lack of oversight violated the Employment Retirement Income Security Act, as well as other investor lawsuits. Tuesday's settlement resolved those claims as well.
"Matters of this nature can drain both time and resources; so where possible and appropriate we feel it is in State Street's and our clients' best interests to pursue settlements," State Street Chief Operating Officer Mike Rogers said in a statement.
The company has "significantly strengthened" its disclosures about indirect foreign exchange, he said. State Street had said last month it was on the verge of reaching a deal.
The settlement is a combination of a $300 million deal for the class that includes a $60 million arrangement with the Labor Department to pay qualifying plans under ERISA, plus $167.4 million to the SEC and $155 million to the DOJ, though there's some overlap in which those two regulators will forgo a portion of their payments if the funds are paid to the class, according to the pension funds. State Street pegs its total payout at $530 million, just under the amount it had set aside to cover the matter.
“We believe $300 million is an excellent result for the class," lead class attorney Lawrence Sucharow of Labaton Sucharow LLP said in a statement. "After years of contested litigation and failed mediation and negotiations, this extraordinary settlement could not have been accomplished without good faith on both sides.”
The government and investors had alleged that when State Street needed to exchange currency on behalf of investors who had so-called standing instruction in place, the bank’s trading unit, State Street Global Markets, would execute the trades in a way that benefited its own accounts instead of seeking out the best price for the plans' forex transactions, or even the actual market rate. Standing instruction allowed State Street to make trades on behalf of investors without seeking approval for each transaction because they happen so frequently.
Specifically, Global Markets priced the trades based on the worst price of the trading day and kept profits at the plans' expense, according to court papers.
The activities took place from 1998 through 2009, according to Tuesday's filings.
State Street said in a May securities filing that it had set aside $565 million to cover the indirect foreign exchange settlement announced Tuesday. The bank said it believed that the set-aside would cover all expenses related to the settlement but could not guarantee that it would face no further legal actions on this issue.
The settlement comes in the wake of Bank of New York Mellon Corp.’s $714 million settlement with New York Attorney General Eric Schneiderman and Manhattan U.S. Attorney Preet Bharara, the SEC and the Labor Department over similar claims.
The SEC’s Office of Investor Education and Advocacy provides a variety of services and tools to address problems you may face as an investor. Investor Alerts, focused on recent investment frauds and scams, and Investor Bulletins, focused on topical issues including recent Commission actions, are provided as a service to investors. They are neither legal interpretations nor statements of SEC policy. If you have questions concerning the meaning or application of a particular law or rule, please consult with an attorney who specializes in securities law. Subscribe to get Investor Alerts and Bulletins by email or Call us at 1-800-SEC-0330
Securities and Exchange Commission (SEC) US Government agency, with the purpose of protecting investors from dangerous or illegal financial practices or fraud, by requiring full and accurate financial disclosure by companies offering stocks, bonds, mutual funds, and other securities to the public.
The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.
As more and more first-time investors turn to the markets to help secure their futures, pay for homes, and send children to college, our investor protection mission is more compelling than ever.
As our nation's securities exchanges mature into global for-profit competitors, there is even greater need for sound market regulation.
And the common interest of all Americans in a growing economy that produces jobs, improves our standard of living, and protects the value of our savings means that all of the SEC's actions must be taken with an eye toward promoting the capital formation that is necessary to sustain economic growth.
The world of investing is fascinating and complex, and it can be very fruitful. But unlike the banking world, where deposits are guaranteed by the federal government, stocks, bonds and other securities can lose value. There are no guarantees. That's why investing is not a spectator sport. By far the best way for investors to protect the money they put into the securities markets is to do research and ask questions.
UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION INVESTMENT COMPANY ACT OF 1940
Release No. 32390 / December 12, 2016
File No. 3-17720
In the Matter of
STATE STREET BANK AND TRUST COMPANY, Respondent.
ORDER INSTITUTING ADMINISTRATIVE AND CEASE-AND DESIST PROCEEDINGS PURSUANT TO SECTIONS 9(b) AND 9(f) OF THE INVESTMENT COMPANY ACT OF 1940, MAKING FINDINGS, AND IMPOSINGREMEDIAL SANCTIONS AND A CEASEAND-DESIST ORDER
The Securities and Exchange Commission (“Commission”) deems it appropriate that public administrative and cease-and-desist proceedings be, and hereby are, instituted pursuant to Sections 9(b) and 9(f) of the Investment Company Act of 1940 (the “Investment Company Act”), against State Street Bank and Trust Company (“State Street” or “Respondent”).
In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement (the “Offer”) which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission, or to which the Commission is a party, and without admitting or denying the findings herein, except as to the Commission’s jurisdiction over it, the subject matter of these proceedings, and the facts set forth in Annex A attached hereto, which are admitted, Respondent consents to the entry of this Order Instituting Administrative and Cease-and-Desist Proceedings Pursuant to Sections 9(b) and 9(f) of the Investment Company Act of 1940, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order (“Order”), as set forth below.
Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASE
Wednesday, January 18, 2017
State Street Corporation Agrees to Pay More than $64 Million to Resolve Fraud Charges
Massachusetts-based global financial services company State Street Corporation (State Street) entered into a deferred prosecution agreement and agreed to pay a $32.3 million criminal penalty to resolve charges that it engaged in a scheme to defraud a number of the bank’s clients by secretly applying commissions to billions of dollars of securities trades. State Street also agreed to offer an equal amount as a civil penalty to the U.S. Securities and Exchange Commission (SEC).
Acting Assistant Attorney General David Bitkower of the Justice Department’s Criminal Division, Acting U.S. Attorney William D. Weinreb of the District of Massachusetts and Special Agent in Charge Harold H. Shaw of the FBI’s Boston Division announced today.
“State Street engaged in a concerted effort to fleece its clients by secretly charging unwarranted commissions,” said Acting Assistant Attorney General Bitkower. “The bank fundamentally abused its clients’ trust and inflicted very real financial losses. The department will hold responsible those who engage in this type of criminal conduct.”
“State Street cheated its customers by agreeing to charge one price for its services and then secretly charging them something else,” said Acting U.S. Attorney Weinreb. “Banks that defraud their clients in this way must be held accountable, no matter how big they are.”
“State Street engaged in an elaborate overcharge scheme which resulted in millions of ill-gotten profits and violated the trust of their clients,” said Special Agent in Charge Shaw. “This agreement with State Street demonstrates the FBI’s commitment to aggressively pursue financial fraud, uncover schemes that undermine investor confidence and hold financial institutions accountable.”
According to State Street’s admissions, bank employees conspired to add secret commissions to fixed income and equity trades performed for at least six clients of the bank’s “transition management” business, which helps institutional clients move their investments between and among asset managers or liquidate large investment portfolios. The commissions were charged on top of fees the clients had agreed to pay the bank, and despite written instructions to the bank’s traders that generally reflected that the clients were not to be charged trading commissions. State Street employees took steps to hide the commissions from the clients. State Street also misrepresented its performance to one of these clients in order to conceal a trading loss.
State Street entered into a deferred prosecution agreement (DPA) in connection with a criminal information charging the company with one count of conspiracy to commit wire fraud and securities fraud. Pursuant to its agreement with the department, State Street agreed to pay a criminal penalty of $32.3 million. State Street also agreed to continue to cooperate with the department and with foreign authorities in any ongoing investigations and prosecutions relating to the conduct (including of individuals); to enhance its compliance program; and to retain an independent corporate compliance monitor for a period of three years.
The department reached this resolution based on a number of factors, including that State Street has already fully repaid the clients who were victims of the scheme. State Street did not receive credit for voluntarily disclosing the misconduct and received only partial cooperation credit because the company did not fully cooperate with the investigation from the start and also because inadequacies in its initial internal investigation prevented it from being able to timely disclose all relevant facts.
In connection with the government’s investigation, Ross McLellan, 44, and Edward Pennings, 45, were charged on April 5, 2016, with conspiring to commit securities fraud and wire fraud as well as two counts each of securities fraud and wire fraud. Their trial is currently scheduled for Oct. 23, 2017. The charges against McLellan and Pennings are merely allegations and the defendants are presumed innocent unless and until proven guilty.
The FBI’s Boston Field Office investigated the case. Trial Attorney Aisling O’Shea of the Criminal Division’s Fraud Section and Assistant U.S. Attorney and Deputy Chief of Economic Crimes Section Stephen E. Frank of the District of Massachusetts are prosecuting the case. The SEC provided valuable assistance to the prosecution.
The Fraud Section plays a pivotal role in the Department of Justice’s fight against white collar crime around the country. Today’s resolution is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
An ETF, or exchange traded fund, is a marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index fund. Unlike mutual funds, an ETF trades like a common stock on a stock exchange. ETFs experience price changes throughout the day as they are bought and sold.
In the simplest terms, Exchange Traded Funds (ETFs) are funds that track indexes like the NASDAQ-100 Index, S&P 500, Dow Jones, etc. When you buy shares of an ETF, you are buying shares of a portfolio that tracks the yield and return of its native index. The main difference between ETFs and other types of index funds is that ETFs don't try to outperform their corresponding index, but simply replicate its performance. They don't try to beat the market, they try to be the market. ETFs have been around since the early 1980's, but they've come into their own within the past 10 years. Money is going out of mutual funds and into ETFs due to a lower cost structure and the inability of almost all active funds to outperform indexes. That means less money for mutual fund companies.
The ETF (Exchange Traded Fund) Industry is exploding-now over $3 Trillion in Assets as of June 2016. And it's poised to Triple in size in next five years according to CNBC.
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Also, the upcoming Department of Labor investment rules pertaining to conflict of interest scheduled to take effect April 10, 2017 are favoring passive ETF investments for Investors and via Advisors. Fact Sheet: Department of Labor Finalizes Rule to Address Conflicts of Interest in Retirement Advice, Saving Middle Class Families Billions of Dollars Every Year
BlackRock Survey Reveals Half of U.S. Investors Plan to Invest in ETFs in 2017
NEW YORK--(BUSINESS WIRE)--
Exchange traded funds (ETFs) will play a bigger role in investment portfolios in 2017, according to data released today by BlackRock, Inc. (BLK). The “BlackRock ETF Pulse Survey,” which polled advised and self-directed individual investors, shows that 52% of U.S. investors intend to buy an ETF in the next 12 months. This trend is reinforced by 94% of U.S. financial advisors, also surveyed, who expect to invest in ETFs in client portfolios in the coming year. 46% of those new purchases would be funded by cash savings.
This Smart News Release features multimedia. View the full release here: http://www.businesswire.com/news/home/20170118005688/en/
The survey also reveals that one in four investors already use ETFs, and that these investors tend to be younger, more engaged in managing their finances, and optimistic about their financial futures than the overall investment population. More than 8 in 10 (82%) of financial advisors currently use ETFs in the portfolios they manage.
“With one-quarter of Americans today already owning an ETF, these are clearly not niche products,” says Martin Small, Head of U.S. iShares at BlackRock. “We fielded BlackRock’s first ETF Pulse Survey to learn not just ‘how many,’ but also to understand who is driving the growth, and how these individuals and advisors use and feel about ETFs in the context of their broader investment mix.”