DES MOINES, Iowa  — The Iowa Public Employees' Retirement System has sued a New York-based auditing firm, alleging that the company failed to detect a theft scheme that cost the pension fund millions of dollars.

The Des Moines Register reports the federal lawsuit was filed in New York last week against Deloitte & Touche. The lawsuit says the auditing firm issued unqualified or "clean" audit reports that the fund relied on in purchasing fraudulent securities.

A Deloitte spokesman says the lawsuit has no merit and that its employees didn't audit the financial statements of the entities at which the fraud allegedly occurred.

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