Federal regulators announced a settlement with Illinois on Monday, accusing President Barack Obama’s home state of misleading investors about the condition of its public pension system from 2005 to 2009.
In announcing the settlement, the Securities and Exchange Commission said that Illinois officials had claimed that they had properly funded public workers’ retirement plans when they had not, The New York Times reports
The commission cited, in particular, the period from 2005 to 2009, when Illinois also issued $2.2 billion in bonds.
The growing decline in the state’s pension system put more pressure on The Prairie State’s own finances during that time, raising the risk that at some point the state would be unable to pay for everything — and that retirees and bond buyers would be competing for the same limited pool of money, The Times reports.
The risk grew deeper every year, the commission said, but investors would not have been able to discern it from the state’s disclosures.
That meant that investors overpaid for bonds that essentially had a lower value than they were made out to have. The commission did not measure any dollar losses — nor did it impose fines or penalties in the settlement, according to the newspaper.
Illinois, however, agreed to a cease-and-desist order without admitting or denying the S.E.C.’s accusations, the publication said.
© 2014 Newsmax. All rights reserved.