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Call Your State Securities Regulator And NASAA, Demand To See Public Pension Prospectuses


To deny state and local government retirement savers—investors who cannot afford to gamble—critical investment information which is routinely provide to wealthy investors globally in prospectuses is unfair. Are we now a nation of two classes of investors?

Most investors are familiar with work of the Securities and Exchange Commission, the federal agency which regulates the securities industry and markets. However, investors often forget there are securities regulators in every state that can be helpful in their battle with Wall Street powerhouses. For more than 100 years, each of the 50 states has had a state securities regulator charged with protecting Main Street investors from fraud. In fact, state securities regulation predates the creation of the federal Securities and Exchange Commission by more than two decades.

Then there is the North American Securities Administrators Association or NASAA. 

NASAA is the oldest international investor protection organization with a membership consisting of 67 state, provincial, and territorial securities administrators in the 50 states, the District of Columbia, the U.S. Virgin Islands, Puerto Rico, Canada, and Mexico. A list of all state securities regulators is available through the NASAA website.

NASAA’s primary goal is to advocate and act for the protection of investors, especially those who lack the expertise, experience and resources to protect their own interests. Says NASAA, “We are driven by our conviction that every investor deserves protection and an even break, and that the welfare of investors must not be sacrificed in the process of capital formation.”

Public Pension Looting Overlooked By State Regulators

In each state in America, the largest pools of investment capital are public pension funds established to provide retirement security for tens of millions of state and local government workers. Public pensions hold over $5 trillion in assets today.

State securities regulators and NASAA have historically had very little to say about Wall Street looting of these pensions. That’s not altogether surprising given that state securities regulators almost universally serve at the whim of elected politicians—politicians who depend upon Wall Street campaign contributions. If a state securities regulator aggressively pursues Wall Street pension looting, she may be swiftly out of a job.

However, since NASAA believes “every investor deserves protection and an even break” the organization should focus upon the disturbing fact that today public pension stakeholders in all 50 states are routinely denied prospectuses and other material investment information related to their pension assets—the very same information which is widely disseminated globally to wealthy individuals. In the absence of prospectuses, public pension stakeholders cannot possibly evaluate whether pension assets are prudently invested.

Public Pension Pandora Papers: Secret Offshore Accounts Abound

While the Pandora Papers unmasked the hidden owners of offshore companies, secret bank accounts, private jets, yachts, mansions and artworks by Picasso, at every state and local government pension in America there are plenty of secret investments.

The largest state pensions have hundreds of secret investment accounts.

These assets are frequently held in offshore tax havens selected by Wall Street billionaires to reduce or eliminate the U.S. income taxes related to the fees they collect from pensions. No state worker or retiree I’ve ever met believes his retirement savings should be held offshore in dodgy tax havens, so it’s hardly surprising that Wall Street wants to keep secret these accounts.

State pension stakeholders are kept in the dark as to the nature of these investments, the firm managing the assets, the fees and risks. State public records laws which are supposed to ensure transparency and public accountability have been eviscerated over the past 15 years as Wall Street has claimed that prospectuses and other securities offering documents related to virtually all pension investments are “trade secrets” exempt from disclosure to state workers, retirees and taxpayers.  

Wealthy investors routinely provided with material investment information in prospectuses which middle income government workers, retirees and taxpayers are not allowed to see? How could such unfair treatment of lower income investors be acceptable to any regulator?

Are we now a nation of two classes of investors?

“Read the prospectus before you invest” is the mantra of every regulator. Great advice, but… state pensioners cannot read prospectuses they are not allowed to see.

Do state securities regulators agree with Wall Street that wealthy individuals who can afford to gamble are entitled to prospectuses detailing costs and risks but pensioners seeking retirement security, who cannot afford to lose, can be kept in the dark?

If brought to the attention of NASAA members, I doubt many state securities administrators would agree that state pensions and Wall Street collaborating to withhold material investment information from state workers regarding their retirement savings amounts to equal protection or “an even break.”

Recently I filed a complaint with the Ohio Department of Commerce, Division of Securities regarding the State Teachers Retirement System of Ohio which has failed since February to provide prospectuses and other offering materials related to the teachers’ pension investments in response to my public records request filed on behalf of 19,000 Ohio teachers. Not a single page of a single prospectus has been released to me by STRS Ohio since February. The Division is investigating my complaint at this time.

In Rhode Island, my request for the prospectuses regarding that state’s pension investments was also denied by Treasurer Seth Magaziner last week as the pension perversely asserts, on behalf of Wall Street, that widely distributed prospectuses can somehow be “trade secrets.” I intend to file an appeal and a lawsuit challenging Magaziner’s secret pension dealings in Rhode Island.

Given that public pensions in all 50 states today refuse to provide some or all prospectuses to stakeholders, including both participants and taxpayers, publci pension secrecy is a national problem that needs to be addressed.

To deny state and local government retirement savers—investors who cannot afford to gamble—critical investment information which is routinely provide to wealthy investors globally in prospectuses is unfair. The integrity of our securities markets depends upon even-handed investor protection. If lower income investors are denied material investment information and exposed to wildly-inappropriate hidden costs and risks, investor confidence—already fragile—will continue to decline.

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