Wichita • Federal authorities announced Monday that Kansas has agreed settle a securities fraud charge accusing the state of misleading investors about the financial health of its public employee pension system in 2009 and 2010 at the time the second-worst underfunded system of its kind in the nation.
The Securities and Exchange Commission said Monday that the state has consented to its cease-and-desist order to settle the case, without admitting or denying its findings. No financial sanctions were imposed. The SEC noted Kansas has since made changes and blamed insufficient procedures and poor communication between state agencies for the problem, which happened under the administration of then-Gov. Mark Parkinson, a Democrat.
"Kansas failed to adequately disclose its multi-billion-dollar pension liability in bond offering documents, leaving investors with an incomplete picture of the state's finances and its ability to repay the bonds amid competing strains on the state budget, said LeeAnn Ghazil Gaunt, chief of the agency's enforcement unit dealing with public pensions.