1. Brown Backtracks
Apparently California Governor Jerry Brown would rather do business with the "street thugs" he knows than the devil he doesn't.
Despite suing State Street (STT) in 2009 for "unconscionable fraud" when he was attorney general, Brown agreed late last week to a new three-year deal with the firm to handle all the custody work for the $232 billion California Public Employees' Retirement System, or Calpers. Calpers, which oversees the pensions of 1.6 million retirees in the Golden State, says the contract is worth about $5.7 million in annual revenue.
"It does seem contradictory," George Diehr, a Calpers board member representing state employees, said in a Bloomberg telephone interview.No Duh Diehr! We have to wonder how bad the competing offers were from JPMorgan Chase (JPM) and Bank of New York Mellon (BK). They must have really bungled their bids for Calpers to select a company the state is currently suing for more than $200 million in damages. Or Calpers could have just been supremely lazy and didn't want to deal with the paperwork, which is also not beyond the realm of reason when you are talking about Cali. The suit alleges State Street violated the state's False Claims Act by overcharging Calpers and the California State Teachers' Retirement System, or Calstrs, by $56 million when pricing certain foreign-exchange transactions. Back in October 2009, Brown wondered why more people were not angered by State Street's actions. He wrote on the Huffington Post at the time that "If street thugs were to hold up a convenience store and drive off with $1 million, it would be national news." Who's the street thug now Jerry? Oh that's right, it's the company watching your state's retirement money. --Written by Gregg Greenberg in New York.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV