In order to move past the legacy legal issues, State Street Corporation STT is soon expected to reach a settlement to resolve matters related to its foreign exchange (“FX”) trades. The company is likely to pay over $500 million to regulators and other plaintiffs. This news was first reported by the Wall Street Journal.The settlement deal is most likely to lead to resolution of investigations from the U.S. Justice Department, Labor Department and the Securities and Exchange Commission. Also, lawsuits filed by the company’s clients including pension funds will be part of the settlement.State Street is accused of illegally overcharging customers on FX-transactions. The company is charged of fraudulent representation and not providing the best prices to its clients including pension funds, while conducting FX trades. These malpractices occurred between 1998 and 2009.The allegations against State Street first came to the limelight when the California attorney general’s office became a part of a whistleblower lawsuit in 2009. This lawsuit accused the company of deceiving California pension funds, The California Public Employees' Retirement System (CalPERS) and the California State Teachers' Retirement System (CalSTRS), through a scheme that overcharges FX-transactions.Notably, State Street, in its latest quarterly filing, revealed that it has set aside $565 million to settle similar claims. The company in a statement said, “settlement agreements have not been finalized”. It expects the amount kept for the same to be sufficient to settle all the claims and probes.Last year, The Bank of New York Mellon Corporation BK had announced settlement of multi-year litigations related to FX trades as well as pension fund services. The company had agreed to pay $714 million. (Read more: BNY Mellon Settles FX-pricing Lawsuits for $714M).Therefore, for State Street, the settlement deal, once announced is expected to relieve it from litigation overhangs to some extent. Also, as the company has already kept the legal provision for settling these charges, the settlement amount is not likely to hamper its profitability.Currently, State Street carries a Zacks Rank #3 (Hold). Some better-ranked finance stocks worth considering include First Bancorp FBP and Cardinal Financial Corp. CFNL. Both these stocks sport a Zacks Rank #1 (Strong Buy).Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BANK OF NY MELL (BK): Free Stock Analysis Report STATE ST CORP (STT): Free Stock Analysis Report FIRST BNCRP P R (FBP): Free Stock Analysis Report CARDINAL FINL (CFNL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research