Securities and Exchange Commission charges Illinois with securities fraudBy Mason White 10:48 AM March 12, 2013
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By: Debbie Gross
(Scroll down for video) A U.S. state was charged with securities fraud for only the second time in history, according to a statement by the Securities and Exchange Commission.
The Securities and Exchange Commission and the Illinois state government have reached an agreement on charges that the state defrauded investors by failing to provide adequate information about their pension funds.
The SEC, which announced the charges in a filing, said that the fraud occurred between 2005 and 2009, when the state sold $2.2 billion in bonds without disclosing the impact of problems with financing pensions. There were no fines or sanctions against the State, as part of the agreement.
“Municipal investors are no less entitled to full disclosure than ordinary investors,” George S. Canellos, acting director of the Division of Enforcement of the SEC, said. “Again and again, Illinois did not inform its investors about the risk of the bonds in its financial statement presented,” the SEC added.
The agency said Illinois issued a corrective disclosure in 2009. The state agreed to settle the SEC allegations without admitting any wrongdoing. A statement from Illinois said the deal is in the best interest of everyone involved and that it had cooperated with the investigation.Mobile video not loading? Click here to view