MORTGAGE RATES FALL: Rates on 30-year mortgages matched the lowest level in decades and those for 15-year loans fell to the lowest point in nearly 20 years.
LOWEST IN DECADES: Mortgage buyer Freddie Mac says the average rate for 30-year fixed loans fell to 4.32 percent, the lowest on records dating back to 1971. The average for 15-year fixed loans fell to 3.75 percent, the lowest on records dating back to 1991.
HOUSING MARKET STILL WEAK: Low rates have done little to boost the struggling housing market, which had its worst summer in more than a decade.
NEW YORK – The Securities and Exchange Commission on Thursday charged two former employees of State Street Bank & Trust Co. with misleading investors about their exposure to subprime investments.
The SEC said John Flannery and James Hopkins marketed the company's Limited Duration Bond Fund as an alternative to a money market fund. But by 2007, the SEC said that fund was almost entirely invested in subprime mortgage-backed securities and derivatives.
In an e-mailed statement, State Street said it has already resolved the matter with clients and that it would "not comment on the SEC's separate investigations into individuals who are no longer with the firm."
An attorney for Hopkins, who the SEC said was employed with State Street until Wednesday, said his client is "proud of his distinguished 34-year career built on personal integrity" and expects to be exonerated.
An attorney for Flannery said his client acted in good faith during his employment as chief investment officer with the company.
The charges against Flannery and Hopkins come after State Street agreed earlier this year to settle a case with the SEC and state regulators involving the same fund. Under the terms of that settlement, State Street repaid investors more than $300 million. The 270 or so investors to be repaid included nonprofits, religious institutions and retirement funds.
According to the latest case, Flannery and Hopkins played an instrumental role in drafting a series of misleading communications about the fund starting in July 2007.
The SEC says the company gave internal advisers more information about the Limited Duration Bond Fund's subprime investments. Those advisers then recommended their clients, including the pension plan of parent company State Street Corp., to get out early.
The SEC's order seeks a ban that would prevent Flannery and Hopkins from being employed in the future with an investment company. The order also seeks an unspecified civil penalty.
In a prepared statement, Flannery's attorney Mark Pearlstein said that his client "acted in complete good faith throughout his period of employment at State Street Global Advisors."
Pearlstein noted that each of the communications at issue in the SEC's order were vetted by State Street's lawyers.
"It is unfair and unjust that the SEC has chosen to bring claims against Mr. Flannery when he believed the letters were accurate and he followed the advice of lawyers at all times," Pearlstein said. He said Flannery left State Street in 2007.
In addition to the $300 million settlement in February, State Street has also paid about $350 million to investors to settle private lawsuits.
Shares of Boston-based parent company State Street closed up 32 cents at $37.66.
SAN FRANCISCO (Reuters) – Hewlett-Packard Co on Thursday named Leo Apotheker as its new chief executive, tapping a software industry veteran to lead the world's largest technology company.
Apotheker spent more than two decades at business software company SAP. He was named SAP co-chief executive in April 2008, and became its sole leader in July 2009. He resigned abruptly earlier this year.
Apotheker succeeds Mark Hurd, who was ousted from HP on August 6 for filing inaccurate expense reports related to a female marketing contractor.
Gleacher & Co analyst Brian Marshall said the appointment was good for HP, which is a dominant vendor in PCs, servers, IT services and printers, but which has a relatively small software business.
"The investment community wanted an outsider to be named CEO. They view HP internally as a little bit dysfunctional in terms of all the issues they had in senior management in the last couple of years," Marshall said.
HP's board also named Ray Lane as non-executive chairman. Lane is managing partner at venture capital firm Kleiner Perkins Caufield & Byers, and previously served as president and chief operating officer at Oracle Corp.
Both appointments are effective November 1, HP said.
The appointments come nearly two months after the controversial August 6 ouster of Hurd, which sent shockwaves through Silicon Valley and upset investors who credited him for turning the company around.
HP shares fell 4 percent to $40.43 in extended trading. The shares closed at $42.07 on the New York Stock Exchange.
(Reporting by Gabriel Madway. Editing by Robert MacMillan)