Intrigue is about the last thing that normally comes to mind when thinking about the municipal bond market or public pension plans. But both have plenty of it all of a sudden, courtesy of a new wave of U.S. Securities and Exchange Commission (SEC) investigations of disclosures about public pension funds to muni bond investors. “Historically this has been a very conservative marketplace, but it is now under the SEC’s microscope,” says Steven Scholes, a partner at law firm McDermott Will & Emery.

Reports surfaced in January that targets of the SEC investigations include the State of Illinois and the State of California. The agency does not publicly disclose its investigations’ specifics. “But they are apparently looking at the actuarial methods being used to calculate pension obligations, and whether pension disclosures made in documents used to sell bonds fully and accurately disclose the actuarial methods,” says Steve Malina, an attorney and shareholder at law firm Greenberg Traurig, LLP.

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