The state of New Jersey appears to have blazed a new trail, but hopefully it’s one that other states won’t follow:
New Jersey is the first state ever charged by the SEC for violations of the federal securities laws. New Jersey agreed to settle the case without admitting or denying the SEC’s findings.
That’s from a press release issued by the SEC on Wednesday. The regulator said it had charged the state with misrepresenting its fiscal position to investors.
According to the SEC, New Jersey “created the false impression” that two of its large pension schemes were adequately funded, though the state was well aware that they were not. Its budget was therefore in worse shape than investors understood when they bought up $26 billion in muni’s between 2001 and 2007.
During those years, by the way, its governor was a former investment banker of some importance.
New Jersey agreed to settle the case without admitting or denying the SEC’s findings.
SEC charges state of New Jersey for fraudulent municipal bond offerings – SEC press release
Fiscal anxiety crosses the pond – FT Alphaville