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California Says Bank Fleeced Pension Funds
State seeks $200M from State Street Bank of Boston
By Nick McMaster
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Posted Oct 20, 09 5:11 PM CDT
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(Newser)
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California sued a Boston bank today and accused it of ripping off $56.6 million from two state pension funds. It wants all that money back, plus another $150 million in penalties. Attorney General Jerry Brown accused State Street Bank of "unconscionable fraud" and called it "just the latest example of how clever financial traders violate laws and rip off the public trust."
Brown says State Street overcharged the pension funds over eight years while conducting currency trades, reports the LA Times. It would set its fee based on the highest exchange rate of the day, not at the time of transaction—and pocket the difference. A bank spokesman denied any wrongdoing.