LOS ANGELES –The former chief of the Securities and Exchange Commission’s municipal securities and public pension unit made her private-sector speaking debut here Thursday at The Bond Buyer’s California Public Finance Conference.

Elaine Greenberg, who joined law firm Orrick, Herrington & Sutcliffe this week as a partner in Washington, D.C., talked about public pensions.

“The status quo is clearly unsustainable and the call for pension reform has been great,” said Greenberg, who spent 25 years at the SEC before departing in July.

She led the muni and pensions enforcement unit from its creation in January 2010 until her departure.

“I witnessed first-hand the lack of transparency regarding funding of public pensions. This lack of transparency resulted in securities fraud,” she said.

Greenberg also assisted on the SEC’s comprehensive report on the municipal market last year.

That report is credited as being the seed from which many current muni-related SEC initiatives have grown.

Greenberg used her speech to offer a primer on the significant pension-related securities fraud cases the SEC pursued, starting with the San Diego case in which the city was sanctioned in 2006.

The SEC got involved because city officials made a decision that had a negative impact on city employee pension funding levels, but did not tell bond investors.

The city was sanctioned for failing to disclose that material information on five offering documents, in presentations to bond rating agencies and in continuing disclosure documents, she said.

“The city’s enormous pension and retiree health liabilities and failure to disclose those liabilities put the city in serious financial straits,” Greenberg said.

Significant cases that followed included New Jersey in 2010 – “the first state ever charged with securities fraud,” she said.

Illinois became the second such state this year.

Greenberg said Illinois’ pension funding shortfalls are the result of the state failing to provide enough funding, and not attributable to market shortfalls.

But that was not communicated to investors, she said, leading to the SEC charges.

“So how do we move from a state of instability to a state of stability on pensions?” she said.

Greenberg did not have an answer, only noting the range of three fundamental alternatives that have been widely discussed:

The first is to move public employees to a defined-contribution plan, or a hybrid, from defined contribution plans.

The second broad option is to change the approach to calculating liabilities, with Greenberg citing the examples of recent initiatives by the Governmental Accounting Standards Board and Moody’s Investors Service.

And the third and final option Greenberg cited is to restructure in bankruptcy, citing Detroit.

“Whatever path one may choose one thing is clear; there must be transparency,” she said. “It is incumbent that market participants take their disclosure obligations under federal securities law very seriously.”

Ultimately a transparent approach benefits everyone, Greenberg said.

“Investors will perceive there is more fairness in the markets because they will be operating on a level playing field,” she said.

Greenberg said there are more than 3,400 state and local pension systems with some 27 million participants, with estimates of up to $4 trillion in liabilities.

“It will continue to garner much attention & focus,” she said.

Greenberg earned bachelor’s and law degrees at Temple University before joining the SEC’s Philadelphia office in 1987 as a staff attorney.

She was later promoted to be a branch chief and then assistant director.

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