A report investigating a financial strategy with the state pension system shows that firms promoted the use of bonds and profited from the arbitrage strategy.
Some of the biggest financial companies — including Goldman Sachs, Seattle-Northwest Securities and the now-defunct Bear, Stearns & Co. — helped create, sell or put into place an investment strategy that attempted to lower an agency's pension costs.
Not only were state laws created to allow the strategy, but companies educated agencies about issuing pension bonds for investment purposes. Companies then turned around and underwrote those bonds, making more than $18 million in the process.
Read the full story at the Statesman Journal.