At the time, many financial institutions were looking to buy these securities for their high rates of return and supposedly strong credit ratings.
The NSI had a product some time ago with high rates of return.
But that assumes their contributions earn high rates of return, keeping up with wage growth.
"You look back now and say those high rates of return were the result of low quality," Mr. Ferrucci said.
Companies have enjoyed high rates of return on capital spending because they have been able to borrow money cheaply.
Hedge funds are lightly regulated pools of capital that seek high rates of return in relatively risky investments.
India's new insurance regulator recently warned it over guaranteeing high rates of return on its insurance products.
Specifically, Stanford is accused of lying about the safety of investments he sold as "certificates of deposit" and promising unrealistically high rates of return.
The winners of the wind boom are predictable – wealthy investors, landowners and renewables firms accepted the invitation to cash in at artificially high rates of return, as intended.
So long as these pension plans offer their beneficiaries gold-plated retirement benefits, money will need to earn high rates of return in order to fund these payments.
Prosecutors charged that Edwin Rodriguez collected more than $747,000 from the investors by describing himself as a highly experienced investor and promising high rates of return.
