By Sam Foster
If you are tired of hearing just how defunct state budgets are, just wait until the tsunami of underfunded state pensions begin hitting the fan.
AS in all things defunct, CA gives us a glimpse of the tip of the iceberg thanks to the latest SEC probe:
The U.S. securities regulator is examining whether the state of California violated securities laws by failing to disclose the risks attached to its public pension fund, the New York Times reported, citing a person with knowledge of the investigation.
California Public Employees Retirement System, also known as Calpers, suffered steep losses during the financial meltdown. The value of the fund's assets had plunged to $160 billion from a peak of $260 billion in 2007, though they have since recovered to about $220 billion.
It is unclear whether investigators are focusing on the failure to disclose risks and the am
ount of money it might need to cover any shortfall or on any possible conflicts of interest in steering investments to related parties, the subject of a separate investigation by the attorney general of California, it said.
Prediction: Obama's administration will bury this investigation.