For the First Time, the SEC Sues a State for Securities Fraud
The Securities and Exchange Commission has sued and settled with the state of New Jersey in the agency’s first-ever securities fraud case filed against a state.
The SEC accused New Jersey of misleading bond investors about underfunded state pensions, according to stories in the Wall Street Journal, the New York Times and the Associated Press. The state didn’t admit or deny the allegations and wasn’t required to pay any penalties, although it did accept a cease-and-desist order.
According to the Times story, “The SEC said its action was meant to dissuade other governments and their advisers from hiding bad fiscal news in a fog of pension numbers.” The SEC continues to investigate several other states for their investor disclosures.
New Jersey’s Treasury Department said it cooperated in the probe, and repayment of bonds was never at risk.
Write a letter to the editor, share a story tip or update, or report an error.
