Feds to Illinois: You Deceived Investors
SEC settles with Illinois over underfunded pension system
By Neal Colgrass, Newser Staff
Posted Mar 11, 2013 3:30 PM CDT
The SEC settled with the state of Illinois, saying it had deceived investors.   (Shutterstock)

(Newser) – Federal regulators accused Illinois of securities fraud today, saying officials had misled investors about the shaky state of the state pension system, the New York Times reports. The SEC said Illinois had issued false annual reports for 15 years claiming the state was keeping up with its required payments to the public pension—when in fact it was slipping further behind. Illinois passed a law in 2005 giving itself a break from even the meager payments it was making.

The SEC also slammed Illinois for issuing $2.2 billion in municipal bonds from 2005 to 2009. Those bonds were falsely marketed, the SEC said, because bond buyers and retirees would eventually vie for the same pool of scarce funds; therefore the bonds were of lower quality. The SEC and Illinois have settled, with Illinois agreeing to a cease-and-desist order without admitting any guilt. It was the second time the feds have accused a state of securities fraud; the first case, in 2010, was about New Jersey deceiving investors over its own underfunded pension system.

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Showing 3 of 80 comments
greenlantern1
Mar 12, 2013 10:45 AM CDT
Illinois violated federal law. The federal government should also be able to regulate corporations. Why should they continue to declare bankruptcy? Why don't we end corporate welfare?
BenDunn
Mar 12, 2013 9:55 AM CDT
I hope the Investors, Illinois and the Pensioners ALL GET SCREWED!!!! Piss on all of you, I hope your whole state goes the way of Chicago or even Detroit Mich. Broke, Murder rate sky high, class warfare, welfare galore, minorites allowed to take over the city and make it a Gang Haven I.E. A Liberal Mecca!!!
BenDunn
Mar 12, 2013 9:43 AM CDT
The SEC and Illinois have settled, with Illinois agreeing to a cease-and-desist order without admitting any guilt. GOD DAMN DEMOCRATS AT IT AGAIN!!!