SEC accuses New Jersey of Fraud

The SEC has accused New Jersey of fraud related to the pensions:

The Securities and Exchange Commission today charged the State of New Jersey with securities fraud for misrepresenting and failing to disclose to investors in billions of dollars worth of municipal bond offerings that it was underfunding the state’s two largest pension plans.

According to the SEC’s order, New Jersey offered and sold more than $26 billion worth of municipal bonds in 79 offerings between August 2001 and April 2007. The offering documents for these securities created the false impression that the Teachers’ Pension and Annuity Fund (TPAF) and the Public Employees’ Retirement System (PERS) were being adequately funded, masking the fact that New Jersey was unable to make contributions to TPAF and PERS without raising taxes, cutting other services or otherwise affecting its budget. As a result, investors were not provided adequate information to evaluate the state’s ability to fund the pensions or assess their impact on the state’s financial condition.

New Jersey is the first state ever charged by the SEC for violations of the federal securities laws. New Jersey agreed to settle the case without admitting or denying the SEC’s findings.

That’s the SEC press release, the  NYT article is here. Needless to say, Democrats were governors most of this time period. On the other hand, Chris Christie not funding the pension at all is not going to work out much better.  

Comments (8)

  1. Hopeful (Post author)

    This is a portion of his statement:

    Senate President Stephen M. Sweeney said news that the U.S. Securities and Exchange Commission had charged the state with securities fraud for failure to tell potential investors that public pension funds were being chronically underfunded highlights the need for the Governor to take the current $3.5 billion pension obligation more seriously.

    Sweeney also questioned why the Treasurer’s office, through its lawyers in the matter, tried to keep the settlement – entered into nearly two months ago – secret. The SEC announced the charges and settlement in a press release earlier today.

    Reply
  2. speedkillsu

    This matter involves New Jersey’s violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act in connection with the offer and sale of over $26 billion in municipal bonds from August 2001 through April 2007. In 79 municipal bond offerings, the State misrepresented and failed to disclose material information …Hmmm lets see 8/01 to 8/07 All  Democrat governors .why weren’t they telling telling the investors the whole truth when they   signed off the state’s borrowing …who’s hiding what ????

    Reply
  3. firstamend07

    Since Steve Sweeney has been in office he has been running up the red flag on the pension system.

    He was thrown under the bus by Corzine, vilified by the leaders of the CWA, and attacked by members of his own party who participated in the demise of the fund under both Republican and Democratic governors.

    NO ONE HAS BEEN MORE IN FAVOR OF FIXING THIS MESS THAN STEVE SWEENEY!

    There are many Sweeney haters on this site but no one can claim that he was for a few years the ONLY elected official in the State who sounded the alarm for pension reform.

       

    Reply
  4. firstamend07

    I am just someone who observes and offers an opinion from the South Of Trenton.

    I definitely work for no one I comment on.

    I am no more affiliated than anyone else on this site.

     

    Reply

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