Brown sues institutional bank for overcharging pension funds
Jerry Brown (D)
OAKLAND, Calif. (Legal Newsline)--California Attorney General Jerry Brown today unveiled a $200 million lawsuit over fraud the Democrat said State Street Bank and Trust perpetrated against two state pension funds.
In a statement, Brown said State Street Bank and Trust, a major service provider to institutional investors, committed "unconscionable fraud" against the state's CalPERS and CalSTRS retirement systems, two of the nation's largest pension funds.
The lawsuit, unsealed Tuesday by a Sacramento County Superior Court judge, seeks to recover nearly $200 million in penalties and overcharges for executing foreign currency trades since 2001.
"Over a period of eight years, State Street bankers committed unconscionable fraud by misappropriating millions of dollars that rightfully belonged to California's public pension funds," Brown said. "This is just the latest example of how clever financial traders violate laws and rip off the public trust."
The case was originally filed under seal by whistleblowers.
Brown's office estimates that the Boston-based bank overcharged the pension funds by more than $56.6 million over eight years.
The lawsuit asks for damages, civil penalties of $10,000 for each false claim, and recovery of costs, attorneys' fees and expenses.
California Public Employees' Retirement System had about $173 billion in assets as of Jan. 31. The California State Teachers Retirement System had $114 billion in assets.