California Sues Boston-Based Bank For Allegedly Overcharging Public Pension Funds


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(Sacramento, CA)
Tuesday, October 20, 2009
California is suing a Boston-based bank for allegedly overcharging the state’s two largest public pension funds. 

Capital Public Radio's Steve Shadley reports...
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Attorney General Jerry Brown filed the lawsuit. 

It alleges that State Street Bank and Trust artificially inflated foreign currency exchange rates so it could skim money from CalPERS and CalSTRS. 
 
Brown says the bank took more than 50-million dollars since 2001. But the suit seeks up to 200-million including penalties and damages.  

California Public Employees Retirement System, or CalPERS, spokeswoman Pat Macht says the state is pursuing an aggressive suit to get the money back...
 
Macht:  “CalPERS has never been shy...and we’re not in this case...to go after every dollar that should be in our fund but isn’t in our fund. We’ve sued the New York Stock Exchange. We’ve sued WorldCom, We’ve sued United Health Care. Any number of companies where we think that we may have left some money on the table...”     
 
The California State Teachers Retirement System, CalSTRS, says it has been conducting business with State Street Bank for 23 years. 
 
The allegations against the bank were raised by two unnamed financial industry whistleblowers. 

State Street denies any wrongdoing.