California Attorney General Jerry Brown announced Tuesday that he is suing State Street Bank and Trust, a unit of State Street Corp., for alleged fraud against the state's two largest pension funds.
The lawsuit seeks to recover $200 million from the bank for alleged illegal overcharges and penalties against the California Public Employees' Retirement System, or Calpers, and the California State Teachers' Retirement System, or Calstrs, Brown said in a statement. "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," he said. "This is just the latest example of how clever financial traders violate laws and rip off the public trust."
Brown said the lawsuit is related to a false-claims complaint filed under seal by whistle-blowers in 2008. A spokesman for Brown said the suit is unrelated to "pay-to-play" allegations that Calpers said last week it was investigating.
State Street did not respond to requests for comment.