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California Says Bank Fleeced Pension Funds

State seeks $200M from State Street Bank of Boston

By Nick McMaster,  Newser Staff

Posted Oct 20, 2009 5:11 PM CDT

(Newser) – 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.

California Attorney Jerry Brown announces a lawsuit against State Street Bank and Trust on Tuesday, Oct. 20, 2009, in Oakland, Calif.
California Attorney Jerry Brown announces a lawsuit against State Street Bank and Trust on Tuesday, Oct. 20, 2009, in Oakland, Calif.   (AP Photo/Noah Berger)
California Attorney Jerry Brown announces a lawsuit against State Street Bank and Trust on Tuesday, Oct. 20, 2009, in Oakland, Calif.
California Attorney Jerry Brown announces a lawsuit against State Street Bank and Trust on Tuesday, Oct. 20, 2009, in Oakland, Calif.   (AP Photo/Noah Berger)
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COMMENTS
Showing 3 of 5 comments
Netstorm2k10
Oct 21, 2009 7:55 AM CDT
Wow. At least two of the banking elites read Newser and thumbed you down, Jay. Wow.
JimW
Oct 21, 2009 6:28 AM CDT
I think I am basically done with banks, they have screwed me one time too many. I trust my money in my mattress far more than I would ever trust a bank again. I have paid off all my debts and cards, and keep only one card for emergency. If I want something, and I don't have the money, then I can't afford it. I would be thinking differently if we had just let them collapse. They are now operating ONLY on money we GAVE them, and are not loaning it out to anyone faintly resembling a small business. I have better things to invest may cash in , instead of getting paid the measly interest they want to pay on savings or checking accounts.
cochiserocks
Oct 21, 2009 1:00 AM CDT
"A bank spokesman denied any wrongdoing." - I assume he was making a comment about his personal sense of responsibility for screwing his fellow citizens out of their hard earned money so he could by a new Porsche - not the fact that their is a morally bankrupt system at work - which was saved from going actually bankrupt by the people they ripped off to begin with, and are now ripping off again to pay their back slapping bonuses - How much more of this shit is the world going to swallow? How much is too much or is this just going to be how it is from here on out - A bank spokesman denying any wrongdoing.

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