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Underfunded Illinois Pension Fund Under Investigation By The SEC For Accounting Fraud
We read last night's news that the massively underfunded Illinois pension fund is now the subject of an SEC inquiry with little surprise: "The Securities and Exchange Commission has launched an inquiry into public statements by Illinois officials about the state's underfunded pension fund, the state's governor's office confirmed Monday night. The Illinois inquiry is focused on public statements concerning an overhaul measure passed in 2010 meant to help shore up the retirement system, said the governor's spokeswoman, Kelly Kraft." The issue at hand is nothing short of complete accounting fraud: "An issue being examined is whether Illinois was taking future savings
and treating them as current reductions in the cost of the pension fund,
said Robert Kurtter, a managing director in the public finance division
at Moody's Investors Service, who said his firm spoke with Illinois
officials about the inquiry. One of the measures that Illinois took to
save costs was to raise the retirement age for newly hired Illinois
workers." To be sure if proven, which the porn freaks at the SEC will never be able to do, unless the pension fund has animate midget porn gifs on every excel spreadheet, this only means that absolutely nobody will go to jail for massively misrepresenting the truth. What we are far more interested in is whether the Illinois Teachers Retriement System, which as readers will recall took offense to us saying they are insolvent last summer, will be the next to follow in being charged with gross fiduciary breach and alleged accounting fraud. Now that development would most certainly not surprise us.
More from the WSJ:
Illinois's pension system is only about 50% funded with liabilities of about $136 billion, according to Moody's. The underfunding, one of the worst among states in the nation, is partly the result of the state frequently skipping its recommended contributions to fund.
Illinois was informed by the SEC of the inquiry in September, Ms. Kraft said. Illinois has included mention of the SEC inquiry in documents being prepared for the sale expected in the next few weeks of a approximately $3.7 billion bond, said Ms. Kraft. The debt is expected to allow the state to make a required pension-fund contribution
The inquiry is the latest example of the SEC probing a state's financial disclosures related to pensions. In August, the federal agency accused New Jersey of failing to properly disclose the true health of its two largest pension funds. New Jersey authorities settled the SEC case without admitting or denying wrongdoing.
In October, the agency said that four former San Diego officials agreed to pay penalties for allegedly misleading investors in $262 million of the city's municipal bonds. The agency said the civil settlement marked the first time it had secured financial penalties against city officials in a muni-bond fraud case.
The SEC currently lacks the authority to require issuers to disclose financial information before selling debt in the muni-market. SEC Commissioner Elisse Walter has said the agency has anti-fraud authority and authority over the professionals that deal in the marketplace.
Oh, so muni investors could easily be buying debt backed by accounting promises, but there is no way to actually check the numbers... And yet each day brings with it more morons spouting gibberish that things in the muni market are really better than expected. Well of course, when all the financials are pulled out of some financial cloaca, how can it be otherwise.
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You don't let Rahm run for Mayor and this is what happens.
thats just the beggining...or should we say the end of the beggining...or the beginning of the end?
BIATCHIZ...china is in the house....
feeding frenzy, bitchez!
Madoff'ed bitchez.
Easy there, accounting fraud is good as it adds to GDP and reduces inflationary expectations.
This cannot be a correct headline. I thought we legalized accounting fraud in April 09.
lol, you just made my morning.
LOL!
http://www.bostonherald.com/business/general/view/20110125cahill_imnot_p...
I wasn't aware they made porno films in Illinois. Must be a Chicago thing.
yes, we are not "the valley" where porn is filmed in every other house, but HOW ELSE ARE WE TO SUPPORT OURSELVES? besides growing grass? lol....
And the witch hunt continues.
Witch Hunt? Really? States are in the hole for trillions in unfunded pension and benefit liabilities and FINALLY someone is shining a light on the situation.
Unfortunately, the lumination is exposing the tax payer getting fucked in the ass by state pols and their voting block unions who gave them their jobs.
"witch hunt?" what kind of drugs you doing man?
"mmmmm....midget porn..." Homer Simpson.
No matter if you DID put porno pic's of sawed-off hotties on every sheet in a excel book they dont care! They are not out to do their jobs.
Another quote from the simpsons....This one is from the comic book store clerk....
"WORST STATE EVER!" (Illinois).
"They are not out to do their jobs."
The only job they have is to warm a chair in order to maintain a facade. Honestly, why would anyone work, when there is no legitimate work that they can do?(legitimate being that no good or service should be provided at gunpoint, but rather by free individuals)
Government employees are no different than a mafia barbershop. Sure, they may cut a little hair, but that is not why they are there. They are there to provide a front for the criminals upstairs.
Government employees are...
Too lazy to work
Too nervous to steal
I was wondering how best to describe this place (the government office I work in - right now). That pretty much sums it up. Funny how the mob provides the best analogies for describing the government.
You'll see more and more of this. I live in a small city which has drawn on escrow accounts to fund budgetary items totally unrelated to the purpose of the escrows. Such practice is illegal explicitly. When confronted, the city official indicated that the mayor and city council were fully aware of this practice and did nothing to prevent it from occuring. As our society continues to collapse, you'll certainly see more of these "fraud by necessity" arguments. Look for people's private defined contribution plans to be the next source of funding budgetary shortfalls, in order to avoid civil unrest and children starving.
cant agree more....wait....yeah....just cant agree more. Illinois seems to be the first one to do it.
Let's see...I am dumb,ok. Low level of intellect. HOWEVER. Accounting or not, we all know that it is not only illegal but DEADLY.
Case in point? Mortgages. See, what your town and others are doing is doing a refi, cash out, so they can keep up with The Real Housewives of two-bit-whore-ville. This happened a few years ago and where are we now?
What kills me and like I said, I claim to be dumb. But, let me sit down with a "budget" and a red pen for fun. Shit, make a game out of it....
ONE THING THAT WILL NEVER COME UNDER REVIEW OR SCRUTINY? THEIR FUCKING SALARIES....
Bell, Californina anyone? Fire chief Wigam makes a cool 500k/yr while the rest of the fighters in the entire world make less than 60k.
it cannot be that hard. Yes, making cuts is hard but it is a matter of if you want to continue as a going concern.
If you want to "live" let's say...you personally would have to lose weight, kick the cholesterol etc. If you dont care to live...DRIVER, TAKE ME TO THE NEAREST HOSTESS OUTLET!!
Ding Dongs for all!!(no, not to be mistaken by our Tres. Secretary mind you).
The Grateful Dead said it best....
"ONE WAY OR ANOTHER...THIS DARKNESS HAS GOT TO GIVE".
Didn't they just steal the playbook from the Social Security Administration?
Spread sheet porn gifs. This is doable....
death spiral, death spiral, death spiral...
Wasn't the manager of the fund himself who came bitching on Zerohedge about the lies of a Pension Pulse article a few months ago?
The fine will be 50 PORN DVD's! AND ONLY THE GOOD STUFF!! NONE OF THAT SOFT PORN CRAP!
Is there anything in Illinois which is NOT completely fucked up??
their half of the border line
Completely? Well, no....but I think I'm getting there!
The fucking ZA. Duh.
Yes, we have a booming Asian carp market. And...never mind, that's all I got.
ME:)....then again strike that
WAW!
I CAN ALREADY SEE TOMORROWS NEWSPAPER HEADLINES!!!
>>> Baby swallows pingpong ball<<<
more on page 2, 3, 4, 5, 6, 7, 8, 9 and 10!!
Isn't CAT headquartered in Illinois? And couldn't they halt a few of their China shipments...and just...well...push that whole freakin' city into that big a$$ lake...you know...so that we can rebuild it with fewer criminal inside takers?
Just thinking out loud here.
Rumors swirling about CAT moving it's headquarters out of Peoria. Compliments of the recent hike in ct.
On a much smaller scale, though still important to the our local economy, Jimmy John's founder is threatening to move corporate headquarters out of Champaign. He's personally high-tailed it to the warmer and more tax-friendly climes of sunny Florida.
Fraud in Illinois???? Say it isn't so!
This is off topic but I have seen your avatar over 1000 times and always try to figure it out . My best guess is a shadow trying to get out of someones ass
Use your zoom key and you will see it is a ram. (You captured my imagination with your question.)
ohhhhhhh. so it's a ram coming out of someone's ass.
All done playing grab-ass with your boyfriends?
It's bad news for gold: now the unfortunate bonds holder must sell their precious metals to get something to eat.
But seriously: who knows, probably actual paper-gold dip has something to do with bursting of bonds bubble.
this country was built on accounting fraud. standard operating procedure for governments, corporations, banks and most of our cherished and prized institutions.
First Rham, and now this? I don't believe it. Of all the things the SEC should be doing.....
I smell a whitewash. I just don't believe anything will happen with you-know-who in the WH.
My gut feeling compass has been indicating for quite a while that states are going bankrupt not so much from the weight of a bloated public workforce, or even gross mismanagement, but from the ubiquitous fraud that kept the true costs of bloat and mismanagement hidden for so long.
It's a PDE using those variables, yes.
.
Illinois in trouble. Who would have thought. With one of the largest illegal eastern european populations in the US, I doubt they do much "tax" collection there.
Collection in Chicago means knuckle-dusters. At some point, the mark can't pay.
Seems like a microcosm of the Indian Political Establishment to me. Thugocracy, Kleptocracy.....
An Ill Wind blows... ;-)
ORI
http://aadivaahan.wordpress.com/2011/01/18/the-callousness-of-pornography/
Federal Reserve needs to show Illinois how the Irish Catholics print money in Ireland now.
Blame it on the snow.
Bring it, fuckin' haters!
Oh...
states, counties, towns, households.......all broke
Illinois will admit certain "irregularities". The FEDs get to act strong.
Illinois' pension programs get the security of a "lockbox" some where in Maryland.
Problem solved.
Geez, it's getting to the point you can't trust anybody to sell good debt.
Fracas probably caused by the Chinese asking Moody which debt is a better buy, Portugal's or Illinois'.
Shouldn't Illinois state accounting fraud be investigated as a RICO case by the FBI, instead of being looked at as disclosure fraud by the SEC?
So far I'm mostly hearing this from bond salesmen (big surprise), accept for the few that I trust and respect, who acknowledge the problems in muni land and don't try to peddle the shit.
How much of the Fed Chairmans goals are linked to these underfunded pension problems? He's talking up equity valuations and actively trying to build an equity bubble while at the same time keeping interest rates at artificially low levels which props up bond valuations. If the Fed Chairman is worried about these pension funds potentially being an economy killer on the state side, bubbles may be his only available short term solution. New York, California, New Jersey and Illinois are all in serious trouble when recognizing their pension problem becomes unavoidable. Bubbles may push off the day or recognition for 5 years but it's coming and it isn't going to be an easy / pretty solution.
...a few of us had lines out for a bit of idle fishing. It was me had the first strike. A lawyer it was. Then there was another, and another lawyer again, 'till all about, the sea was made of lawyers and more lawyers still, and no water at all.
My lawyer had torn himself from the hook, and the scent, or maybe the stain it was, and him bleeding his life away drove the rest of them mad. Then the beasts began to eating each other.
In their frenzy, they ate at themselves.You could feel the lust of murder like a wind stinging your eyes, and you could smell the death, reeking up out of the sea. I never saw anything worse... until this little picnic tonight. And you know, there wasn't one of them lawyers in the whole crazy pack that survived....
The real reason the Bernank is blowing a stock market bubble is an attempt to rescue pension funds everywhere that are grossly underfunded (and a secret bailout to banks with the billions in commissions from POMO).
Main street has no appetite for bailouts and if the large pension funds cut back on benefits the pitchforks and torches will come out en-mass.
Somewhere in darkest Springfield, an out of shape little accountant at the Illinois State Retirement Systems is going to prison for the rest of his life.
His crime? Being the last one out of the building when the SEC showed up looking for witches.