Premier Global Securities Lending (PGSL) has settled the lawsuit lodged against it by State Street, which claimed PGSL “raided” its securities finance unit for staff and clients. PGSL, which settled its countersuit as well, also has ceased operations, according to Craig Starble, founder of the third-party agent lender.
Starble and Michael Landolfi, a senior managing director, both confirmed a settlement had been reached. I can tell you the action has been settled and resolved in a satisfactory way to all parties, Starble told Global Custodian. That is the only comment I can make on the case itself. A State Street spokesperson declined to comment.
Starble also confirmed PGSL had closed down because it couldnt attract investors. It was a startup venture, and we reached a point where we couldnt raise the capital, he says. The decision was made a while ago. The Boston-based company withdrew its LLC registration April 5, according to a business entity search with the secretary of the Commonwealth of Massachusetts.
Starble, former head of securities finance at State Street, launched PGSL in 2009. In June the following year, eight more State Street staff left to join PGSL. They were Peter Economou and Paul Lynch (who were also named as defendants in the lawsuit) along with Landolfi, Suzanne Lee, Michael McAuley, William Locke, Oberon Knapp and Larry Albaugh.
State Street claimed Starble conspired to poach its staff, wooing his former employees and co-workers at secret meetings about his new venture at Starbucks and pro basketball games, according to Boston.com.
After the departure of the nine securities lending employees, State Street appointed Nick Bonn, a GC Legend, to head its securities finance business. Bonn previously was head of sales for its Global Markets and Securities Finance division.
In July, PGSL called the suit “meritless” and categorically rejected any wrongdoing. It also claimed the former State Street staff that followed Starble to PGSL were at-will employees at State Street, and none of the employees had a non-compete agreement with State Street. PGSL at the time filed a countersuit.
McAuley, one of the State Street staff that left for PGSL, was recently appointed managing director and senior business strategist for the Global Securities Lending Business of BNY Mellon Asset Servicing.