The State Employees Association of North Carolina, which represents tens of thousands of workers, has filed a complaint with the Securities and Exchange Commission over management of the state pension fund.
The union has for years criticized the way State Treasurer Janet Cowell and her predecessor, Richard Moore, both Democrats, have handled the $86 billion pension system.
Under North Carolina law, the state treasurer has the authority to make decisions about pension fund investments, and the SEANC is calling for an investment board to manage the money.
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Its complaint to the SEC's whistleblower program cites "false/misleading information in official statement documents."
The move came after former SEC attorney, Edward Siedle, who runs a firm that investigates the money management industry, presented the findings of a months-long investigation into the fund, according to the Charlotte Business Journal.
The SEANC hired Siedle in January to examine the fund for fraud, conflicts of interest, undisclosed and excessive Wall Street fees.
In his report, Siedle said that Cowell has entered into a number of secret Wall Street agreements in which $30 billion of state money is invested.
Central to the complaint is that Cowell can put up to 35 percent of the money into hedge funds, private-equity firms and other alternative investments that don't have to disclose details to retirees or the SEANC.
The union's complaint also alleges that the $416 million in fees that Cowell's office reported paying investment fund managers in the year ending last June understated the real amount by hundreds of millions of dollars.
Cowell has appointed an outside commission to examine the state's public pension funds and decide whether any changes are needed to the rules that govern the investments. It is expected to release its recommendations Thursday.
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