The Securities and Exchange Commission has accused the state of Illinois of securities fraud.  According to NyTimes, it is the “second time in history that federal regulators have accused an American state of securities fraud.”  The reason for the accusations: Illinois apparently misled investors about the condition of its public pension system from 2005 to 2009.  On Monday, the SEC reached a settlement with Illinois where Illinois agreed to a cease-and-desist order.

What Are The Accusations Against Illinois?

  • From 2005 to 2009, Illinois incorrectly claimed that it had been properly funding public workers’ retirement plans when it had not.
  • Illinois misled investors into overpaying for bonds

According to acting director of the S.E.C.’s Division of Enforcement, George S. Canellos, “time after time, Illinois failed to inform its bond investors about the risk to its financial condition posed by the structural underfunding of its pension system.”

What Is Securities Fraud?

Securities fraud occurs when companies or individual executives and board members conduct themselves in an illegal manner.  To prove fraud, a person must prove that a person or business intentionally or knowingly deceived another, causing damages.  Securities fraud lawsuits can be filed in state or federal court.  When the Securities and Exchange Commission files lawsuits alleging securities fraud, they assert that fraud took place because the business did not abide by federal law.  Usually, if the case involves fraud, it means the business or executives misstated facts about the business, about how the money was used or about the likelihood of success the business would achieve.

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If you have been the victim of Securities fraud, contact an experienced Securities Fraud Attorney today.