Illinois Settles SEC Charges

Apparently the Land of Lincoln is not so honest. On Monday the state of Illinois agreed to settle fraud charges by the SEC alleging that it deceived municipal-bond investors about how underfunded its pensions were. The SEC charged that while Illinois claimed market performance was the source of the underfunding, in reality the state created a system that diminished annual contributions through pension holidays and a mechanism called “ramp-ups,” making Illinois unable to meet future obligations. With the settlement, Illinois neither admitted nor denied the charges and has not been ordered to pay a penalty.