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Calif. sues State Street Bank for fraud

October 20, 2009 12:00:00 AM PDT
California Attorney General Jerry Brown is suing State Street Bank and Trust Co.In a news conference Tuesday Attorney General Jerry Brown presented a $200 million lawsuit alleging State Street Corporation of Boston bilked California's two largest pension funds of more than $56 million over an eight year period.

Brown's office launched an investigation after a group of whistleblowers alleged the Boston-based bank was charging the pension funds secret and substantial markups on foreign currency exchange trades.

Brown claims the funds were given the worst rates of the day which is allegedly a contract violation.

Eyewitness News attempted to get a statement from State Street's office in downtown Los Angeles, but was stopped by the security in the lobby of the Flower Street building.

Eyewitness News then called the State Street office and was told to call their corporate office in Boston. The bank denied the claims.

"We categorically deny any allegations of wrongdoing and will defend ourselves against any litigation," Carolyn Cichon, a spokeswoman said.

The California Public Employees' Retirement System says they fully support the investigation.

During the news conference Jerry Brown did make a point that other states may also sue State Street over the same allegations. He said, "California is not alone in its claims."

Attorney General Jerry Brown is a former governor for the state of California and is a possible candidate for the governor's seat in the next election.


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