State Street

(STT) - Get Report

faces possible civil action from the

Securities and Exchange Commission

related to certain investments tied to subprime mortgages sold to customers, according to a regulatory filing on Monday.

The Boston-based company received a so-called Wells notice on June 25 regarding its principal subsidiary State Street Bank and Trust Co., according to the filing. Wells notices give recipients an opportunity to respond to regulatory complaints before they are filed.

The Wells notice relates to an ongoing SEC investigation into "disclosures and management by State Street Global Advisors of certain active fixed-income strategies during 2007 and prior periods."

The SEC staff intends to ask SEC commissioners to bring a civil enforcement action against State Street for possible violations of securities laws, the filing said. State Street will have an opportunity to present its perspective on these issues before any formal decision is made on an enforcement proceeding.

State Street is cooperating with the SEC as well as the Massachusetts secretary of state, the Massachusetts attorney general and other regulators, regarding an investigation by state regulators for similar reasons, it said.

The investigation stems from losses State Street customers experienced regarding certain actively managed fixed-income strategies that contained investments backed by subprime mortgages. As the credit crisis intensified in 2007, some investors threatened legal action to recoup investment losses. The company took a

$279 million charge

in the fourth quarter of 2007 and fired State Street Global Advisors' top executive William Hunt in the process.

State Street is one of many institutions hurt by an erosion of values on securities backed by subprime mortgages. Banks including

Citigroup

(C) - Get Report

,

Merrill Lynch

(subsequently bought by

Bank of America

(BAC) - Get Report

) and

Bear Stearns

(subsequently bought by

JPMorgan Chase

(JPM) - Get Report

), also experienced severe losses on securities as a result of the subprime meltdown.

State Street shares recently were falling 1.8% to $47.47.