New Jersey has become the first state ever charged with securities fraud after the United States Securities and Exchange Commission found Wednesday the state failed to tell bond investors it was underfunding its pension fund.

The state of New Jersey and the SEC immediately settled the charges without fines or penalties. According to the State Attorney General’s office, New Jersey failed to include information about benefits, including a nine percent increase granted in 2001, to investors who bought $26 billion in bonds. The SEC began its inquiry in 2007.

“Issuers of municipal bonds must be held accountable when they seek to borrow the public’s money using offering documents containing false and misleading information,” Elaine Greenberg, chief of the commission’s Municipal Securities and Public Pensions Unit said. “New Jersey hid its financial challenges from the very people who are most concerned about the state’s financial health when investing in ins future.”

If you are a whistleblower with information about fraud on the government, you may be able to bring a Qui Tam lawsuit under the False Claims Act. Please contact the Qui Tam Attorneys of Tycko & Zavareei, LLP, at 202-973-0900 today.