California Public Employees' Retirement System, knew it was paying uncompetitive rates on foreign-exchange trades as early as 2003, the Wall Street Journal said, citing a consultant who advised the largest U.S. public pension fund.

Last month, California's attorney general sued State Street Corp , contending that State Street Bank and Trust overcharged Calpers and the California State Teachers' Retirement System for the costs of executing foreign currency trades since 2001.

State Street has denied any allegations of wrongdoing.

We were hired in the third quarter of 2003 by Calpers to write a report on FX pricing from their custodians, Neil Record, chief executive of UK fund firm Record Currency Management , told the Journal.

We submitted that report at the end of 2003 ... and we found uncompetitive pricing, the paper quoted Record as saying.

Record declined to tell the Journal the name of the banks that his firm audited.

Calpers declined to specifically comment to the paper on the issue. Reuters could not immediately reach the pension fund for comment regular U.S. business hours.

(Reporting by Ajay Kamalakaran in Bangalore; Editing by Lisa Von Ahn)

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