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Illinois continues its criminal ways with bond fraud!

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.

Excerpt:

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.

 

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7 Comments

  1. That isn’t fraud, it is Chicago-style politics as usual.

  2. This is worth watching, too bad it probably won’t make a difference.
    http://legalinsurrection.com/2013/03/paul-mckinley-gives-walking-tour-of-il02-devastation/#comments

    • Ted Biondo

      You are absolutely right Wilson, it will not make a difference to the people who live by the whim of the Chicago machine. Machines have devastated many municipalities just like the in Chicago.

  3. Todd A

    “Chicago style politics”.

    Heh, heh, heh. What do you call it when Wall Street banks and hedge fund managers do it in New York?

    So how many people have lost their hind ends due to this transgression by the evil state of Illinois? Don’t get me wrong, the state needs to stop this but you guys shouldn’t act as though this is some major problem. The bonds will still mature and they will still be paid. By contrast, when Wall St does this people’s lives are ruined, retirements delayed and fortunes lost.

  4. I can’t find an exact number, but quite a few businesses have failed, due to Illinois’ failure to pay their bills. Others are having to borrow money to keep operating, and/or refusing to do any further business with the state. See some examples here:

    http://globaleconomicanalysis.blogspot.com/2010/05/illinois-doesnt-pay-bills-crisis-pushes.html

  5. Todd A

    Snuss, what does not paying the state bills have to do with securities fraud concerning bond sales? You’re talking about something totally different but that is your MO so it is to be expected.

    In fact, had the state sold more bonds (legit or not) those agencies you’re talking of would have had a better chance of receiving their funding. Again, not saying what happened is OK but please stick to the topic at hand.

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