The U.S. Securities and Exchange Commission (SEC) charged the state of New Jersey Wednesday with lying and withholding information to investors in billions of dollars worth of municipal bond deals.
The allegations involve $26 billion of bond offerings from 2001 to 2007 in which the state obfuscated its underfunding of public employee pension funds, creating a false impression of fiscal stability.
The state became the first ever charged with violations of federal securities laws, SEC enforcement director Robert Khuzami announced.
"The state of New Jersey didn't give its municipal investors a fair shake," Khuzami said in a statement.
New Jersey agreed to a settlement without admitting or denying the charges, the SEC said.
The settlement was non-monetary, a spokesperson for the state told Dow Jones Newswires.