“Jersey Sure? The SEC Gets Tough on Public Fund Accounting”
Plansponsor, November 2010
Steven Scholes said the SEC’s securities fraud charge against the state of New Jersey for misleading municipal pension securities investors by masking pension underfunding was somewhat unusual because there is little SEC enforcement of municipal offerings. Mr. Scholes asserted that the SEC’s message has been heard, and that municipal issuers in the future will likely ensure that they have appropriate, reasonable, defensible assumptions for calculating their pension liabilities. He also pointed out, however, that any past problems with accounting for these liabilities (which are particularly acute because of the financial stress governmental entities currently face) could still subject municipalities to SEC investigation.