The Securities and Exchange Commission (SEC) charged the State of New Jersey with securities fraud for failure to disclose information regarding the state’s two largest pension plans while offering and selling billions of dollars worth of municipal bonds.

According to the SEC statement, from 2001 to 2007 the state offered and sold over $26 billion in municipal bonds.  By offering these bonds, the state masked the fact it was not able to make contributions to the Teachers' Pension and Annuity Fund (TPAF) or the Public Employees' Retirement System (PERS) without raising taxes or cutting its budget.

The State of New Jersey agreed to settle with the SEC while neither admitting nor denying the SEC’s findings.  New Jersey is the first state to ever be charged by the SEC with violating federal securities laws.

SEC Charges State of New Jersey for Fraudulent Municipal Bond Offerings

• • 9/8/2010 8:21:15 AM
  • nick.henrey
  • Stock Fraud Attorney
  • New Jersey would not have been accused of deceiving municipal bond investors if they had adopted the Colorado “state pension debt relief scheme” . . . . . that is, seize vested, accrued, contracted benefits from retirees until you reduce your unfunded pension liabilities sufficiently to raise the rating on your municipal bonds. This approach also removes the need for states to purchase municipal bond insurance, no need to insure bonds against default when you can waive a wand and make the debt disappear. If every state adopted Colorado’s asset seizure policy the SEC could eliminate its municipal bond regulatory function altogether, saving more taxpayer dollars. Bonus! Hello state and local governments . . . round up those rascally debt problems and send them out west to us in Colorado, we’ll fix um right up! Thanks For Sharing.. <a href=http://www.stockfraudattorney.info>Securities Fraud Attorney</a>

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