California sues State Street bank for $200 million
California’s attorney general, (and former Democrat Governor) Jerry Brown, is suing Boston-based State Street for an “unconscionable fraud” against the state’s two largest employee pension funds, CalPERS and CalSTRS. His argument is fairly technical, but Brown claims by manipulating the interbank rates for the foreign currency trades that State Street conducted on behalf of the Californian funds, it defrauded its clients of $56 million over the year. The bank was obligated to charge the interbank rate at the exact time of the trade, however, it consistently charged at or near the highest rate of the day. (Couple of pennies here and there, make the millions in the long run.) Brown also accuses State Street of concealing its fraud by not providing time-stamping data in its reports. Needless to say, State Street denies any wrongdoing and will fight the charges, probably until Brown leaves his post. Read more: The New York Times
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