In 2013, the Securities and Exchange Commission (SEC) charged the State of Illinois with securities fraud for misleading municipal bond investors about its pension funding obligations. The SEC’s investigation found that Illinois, between 2005 and 2009, misrepresented the risks associated with its pension funding schedule when offering more than $2.2 billion in municipal bonds. The state failed to disclose that its statutory plan significantly underfunded pension obligations, thereby increasing financial risks. In 2013, Illinois agreed to a cease-and-desist order to resolve SEC charges under Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933. (link to the SEC Cease-and-Desist Order)