UPDATE 1-U.S. SEC probing Florida state investment fund

(Adds SBA director's comments, byline, updates fund figures)

By Michael Connor

MIAMI, Nov 6 (Reuters) - U.S. federal regulators have launched a fraud investigation into the state agency that runs Florida's $110 billion pension system and another fund hit by a 2007 depositors run, according to government documents.

Documents from the U.S. Securities and Exchange Commission, made public on Friday by Florida's St Petersburg Times newspaper, said the agency's investigation of the Florida State Board of Administration (SBA) is tied to subprime mortgages and includes three Wall Street broker dealers.

The firms were listed as Credit Suisse Group AG unit Credit Suisse Securities LLC (CSGN.VX: Quote, Profile, Research), JPMorgan Securities Inc (JPM.N: Quote, Profile, Research) and defunct investment bank Lehman Brothers LHKQ.PK.

"Basically, what this is is a step in a process that began two years ago," Ash Williams, SBA executive director, said in an interview from Tallahassee, Florida. "We have been fully cooperative and will continue to be."

The non-public investigation centers on whether fraud or deceit were used in placing billions of dollars of mortgage-backed securities with Florida Prime, an SBA-run fund stung by steep losses in 2007 at the depths of the subprime-credit crisis, according to the documents.

Then known as the Local Government Investment Pool and designed as a safe-harbor, money market-like fund for Florida cities, counties and other municipalities, Florida Prime was hit by a headline-making run by its depositors.

Williams, who took over the Florida investment funds in late 2008, said Florida Prime now had about $5 billion in assets and that its operations and safeguards had been overhauled since the 2007 crisis.