US prosecutors announced charges on Tuesday against two former State Street Corp executives for scheming to defraud six clients, including the National Treasury Management Agency (NTMA), through secret commissions on billions of dollars of trades.

Ross McLellan, a former State Street executive vice president, was arrested on charges including securities fraud and wire fraud, prosecutors said. The indictment was filed in federal court in Boston, where the custody bank is based.

The indictment also charged Edward Pennings, a former senior managing director at State Street who is believed to be living overseas and was not arrested, prosecutors said.

Mr McLellan (44) was arrested in Hingham, Massachusetts, where he lives, and will appear later in the day in Boston federal court.

Martin Weinberg, Mr McLellan's lawyer, said in a statement that the evidence would show his client "committed no criminal acts and had no criminal intent."

A lawyer for Mr Pennings (45), could not be immediately identified.

The case followed a 2014 settlement between State Street and the UK Financial Conduct Authority in which the bank paid a fine of £22.9 million (about $37.8 million) for charging the six clients “substantial mark-ups” on certain transitions.

State Street has reimbursed more than €3 million to the NTMA, which had oversight of the former National Pension Reserve Fund (NPRF) in relation to overcharging dating back to 2010.

In a statement, State Street said: “These indictments relate to two former employees who were separated from State Street several years ago. The charges relate to the same transitions for six clients conducted by our UK Transition Management business during 2010 and 2011 as to which we entered into a settlement with the FCA in 2014.

“As disclosed in our regular financial filings we have been co-operating with the US governmental authorities about this matter for the past few years. Since 2011 we have significantly strengthened our controls and reporting mechanisms within this business.”

The NPRF terminated the mandate held by the company to manage €650 million worth of equities for it, follwoing the fine levied on it in the UK. The NPRF has since been replaced by the Ireland Strategic Investment Fund (ISIF).

According to the US indictment, Mr McLellan,Mr Pennings and others conspired from February 2010 to September 2011 to add secret commissions to fixed income and equity trades performed for the six clients of a unit of the bank.