California's state controller has expressed alarm at what he called "extravagant" pay packages awarded to former top executives at Morgan Stanley and urged the state's two largest pension funds to act. It came as lawyers for a third fund filed a lawsuit against the bank.

Steve Westly, controller of the state of California, denounced the "outrageous" compensation packages given to Philip Purcell, former chairman and chief executive and Stephen Crawford, former co-president.