Oct. 20 (Bloomberg) -- California’s attorney general said he will sue a “major institutional bank” in an attempt to recover almost $200 million in illegal overcharges and penalties charged to the state’s two largest pension funds.

California Attorney General Jerry Brown will announce the lawsuit filing and name the bank at a news conference in Oakland today, he said in an e-mailed statement. Brown’s spokesman, Scott Gerber, declined to name the bank before the announcement.

The unidentified bank assessed the overcharges and penalties against the California Public Employees’ Retirement System, the largest U.S. defined-benefit public pension fund, and the California State Teachers’ Retirement System, according to the statement.

Calpers, which oversees $200 billion, said last week it began a special review of fees investment managers paid to placement agents to win state business. The fund said it informed the U.S. Securities and Exchange Commission and the California Attorney General of the review.

To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net.

Last Updated: October 20, 2009 00:01 EDT