SEC Legalizing Fraud

The state of New Jersey was charged by the SEC with committing fraud in its pension disclosures at around 9 am on August 18, 2010.  A few hours later the case was settled.

The state of Illinois was charged by the SEC with committing fraud in its pension disclosures at around 9 am on March 11, 2013.  A few hours later the case was settled.

And the SEC wonders why investors think its spineless.  I’m not an investor but I do wonder what this prosecution-by-kabuki accomplishes.  Let’s see how New Jersey panned out.

At the heart of the New Jersey action was this claim by the SEC on that August, 2010 morning:

“the State did not adequately disclose that it was under funding TPAF and PERS, why it was under funding TPAF and PERS, or the potential effects of the under funding”

Of course New Jersey was also under funding the PFRS, the State Police plan, and the Judges’ plan and has continued to systemically under fund the plans through the inane idea (which they made law) of putting in a fraction of the ARC annually (i.e. defaulting on a larger fraction) which allowed governor Christie to say with confidence and some pride in his last state of the State address:

.

.

to 30 seconds of applause.  Of course he might instead have said that this budget contains the largest pension default, $2.3 billion,  on a contribution made by the state of New Jersey though that would not have been true.

Would he still have gotten 30 seconds of applause?  From the SEC?

One response to this post.

  1. Posted by Tough Love on March 12, 2013 at 2:38 pm

    I too am quite amazed that he has tuned such a “negative” into positive political PR.

    Ignorance and apathy are rampant among our Citizenry … and BOTH the Unions and the politicians work that to it’s fullest.

    Reply

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