Guest Column: The SEC and Illinois pensions fraud | The Rock River Times

3 Apr

According to a March 13 Wall Street Journal WSJ editorial, “It’s now official: The Land of Lincoln has the nation’s most reckless and dishonest state government when it comes to pension liabilities.” The WSJ concluded that the state’s “accounting practices would get private market participants thrown in jail.”

This WSJ financial curse will continue to echo throughout Wall Street’s bond markets and ratings services, because on March 11, Illinois was branded with pensions fraud by the Securities and Exchange Commission SEC. The only other state to be branded with pensions securities fraud by the SEC was New Jersey in 2010.

Accordingly, the convoluted pensions machinations in current Illinois pensions bills, such as Senate Bill 1, Senate Bill 35, and associated bills, will obviously raise specters of more federal regulatory scrutiny, including more SEC scrutiny. Specifically, the SEC highlighted that the Illinois fraud and SEC violations were triggered by the 2006 and 2007 “pension holidays” and by the state’s failures from 2005 to 2007 “to disclose that its statutory plan significantly underfunded the state’s pension obligations.” More…

via Guest Column: The SEC and Illinois pensions fraud | The Rock River Times.

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