California Public Employees Retirement System

Four years ago, at the height of the real estate bubble, it seemed like a great idea: buy Manhattan's massive Peter Cooper Village and Stuyvesant Town housing complexes, throw out the existing tenants and raise the rents to market rates, then sit back and collect billions. But on Monday, Tishman Speyer threw in the towel, turning the complex over to creditors in one of the the biggest real estate fiascoes in history.

California Attorney General Jerry Brown is suing State Street Bank and Trust (SST), seeking $200 million in damages for allegedly defrauding the state's giant pension funds. "Over a period of eight years, State Street bankers committed unconscionable fraud by misappropriating millions of dollars...