According to the Reboot Illinois organization, the Securities and Exchange Commission slapped Illinois with fraud charges for failing to disclose the true risk of bonds it sold between 2005 and 2009.
Not only was Illinois playing a shell game of a budgeting process that is bankrupting the state, they hid the true risk of its horrendously high pension obligations on the bonds it is selling to investors to pay off their debt, the SEC ruled.
Illinois became only the second state (along with New Jersey) to be disciplined by the
Securities and Exchange Commission for committing securities fraud.
This may have been news to the SEC and to the national media now writing about it but there was plenty of complaining about the shorting and skipping of pension payments when it was going on.
Senate Republican Leader Christine Radogno says her caucus alerted the SEC to the practice eight years ago. The SEC’s cease-and-desist order doesn’t carry any fines or penalties for the state, though those could come if Illinois violates the order.
Illinois can now add fraud to its record as the nation’s leading scofflaw state as another example of Illinois’ financial dysfunction.
This act, however, was intentional and is above and beyond the past incompetence shown by Illinois legislative leaders in the past and those responsible should be prosecuted to the full extent of the law, so the state can maintain a minimum of decorum.