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SEC Launches Probe Of IL Pension Fund

From the Wall Street Journal:

Illinois Confirms Inquiry by SEC

January 25, 2011

The Securities and Exchange Commission has launched an inquiry into public statements by Illinois officials about the state’s underfunded pension fund, the state’s governor’s office confirmed Monday night.

The Illinois inquiry is focused on public statements concerning an overhaul measure passed in 2010 meant to help shore up the retirement system, said the governor’s spokeswoman, Kelly Kraft…

An issue being examined is whether Illinois was taking future savings and treating them as current reductions in the cost of the pension fund, said Robert Kurtter, a managing director in the public finance division at Moody’s Investors Service, who said his firm spoke with Illinois officials about the inquiry.

Isn’t that Obama-care accounting? Are they going to investigate the Congressional Budget Office next?

One of the measures that Illinois took to save costs was to raise the retirement age for newly hired Illinois workers. Mr. Kurtter mentioned the inquiry in a report released Monday evening.

Illinois’s pension system is only about 50% funded with liabilities of about $136 billion, according to Moody’s. The underfunding, one of the worst among states in the nation, is partly the result of the state frequently skipping its recommended contributions to fund.

Gee, we wonder where the money went.

Illinois was informed by the SEC of the inquiry in September, Ms. Kraft said. Illinois has included mention of the SEC inquiry in documents being prepared for the sale expected in the next few weeks of a approximately $3.7 billion bond, said Ms. Kraft…

Funny how the voters of Illinois only get to hear about this after the November elections.

The inquiry is the latest example of the SEC probing a state’s financial disclosures related to pensions. In August, the federal agency accused New Jersey of failing to properly disclose the true health of its two largest pension funds. New Jersey authorities settled the SEC case without admitting or denying wrongdoing.

In October, the agency said that four former San Diego officials agreed to pay penalties for allegedly misleading investors in $262 million of the city’s municipal bonds. The agency said the civil settlement marked the first time it had secured financial penalties against city officials in a muni-bond fraud case…

Given the financial state of our states and cities, you can bet there is a lot of this kind of misrepresentation and fraud going on. Why else would people still keep buying state and muni-bonds?

This article was posted by Steve on Tuesday, January 25th, 2011. Comments are currently closed.

5 Responses to “SEC Launches Probe Of IL Pension Fund”

  1. proreason says:

    It’s a crowded field, but the SEC stands out as the biggest government failure of all time.

    Failure after failure after failure.

    We would be better off if regulation of markets was being conducted by Bernie Madoff.

  2. NoNeoCommies says:

    In an unrelated story, Rahm Emanuel has received a surprising surge in donations from undisclosed sources.

  3. GetBackJack says:

    I read this stuff, and then it falls into the Memory Hole and NOTHING significant ever changes.

  4. P. Aaron says:

    Illinois, Fannie, Freddie, Social Security, Medicare, Obamacare, etc. Our Gov’t: legislating fraud into a ‘legal’ practice.

  5. Papa Louie says:

    “An issue being examined is whether Illinois was taking future savings and treating them as current reductions in the cost of the pension fund”

    I wonder when it will occur to them that they could reduce costs even more by increasing the state’s murder rate. That would lower the average life expectancy of Illinois retirees and reduce the amount of expected payout. Oh wait… it already has! This headline from 2010 says it all:

    “Homicide rate jumps in Chicago, Daley pushes for more gun control”

    So that’s why the left loves gun control. When only law breakers have guns, the murder rate goes up. By being for gun control, the left can claim they have a heart when, in reality, they are for population control.

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