Mississippi County Files Price-Fixing Suit

WASHINGTON - A third class action lawsuit alleging Wall Street and other firms engaged in price-fixing of municipal derivatives and guaranteed investment contracts has been filed in a federal court in New York by a Mississippi county. However, the attorneys who filed two earlier suits in a federal court here are urging a federal panel to transfer and consolidate all of the cases here.

Hinds County, Miss., which includes the state capitol of Jackson, filed its suit against 35 firms on behalf of itself "and all other similarly situated state and municipal entities" in the U.S. District Court for the Southern District of New York in Manhattan, on March 13.

The filing came a day after the state of Mississippi, Chicago, and five other issuers filed similar suits in the U.S. District Court for the District of Columbia. Chicago has since withdrawn from one of the suits and Alabama State University has said that it plans to withdraw from both suits. Neither would explain their actions.

Of the two earlier suits, one is against Bank of America NA and the other is against 36 additional companies. Specifically, they charge that the firms conspired to fix the muni derivatives market in violation of federal antitrust laws.

The suits come as the Securities and Exchange Commission, the Justice Department, and the Internal Revenue Service are reportedly close to filing criminal and civil charges in their own parallel investigations of alleged antitrust and anticompetitive practices in the municipal market, including bid-rigging and price-fixing.

Though an attorney representing Hinds County, Precious Martin Sr., of Precious Martin Sr. & Associates PLLC, did not return phone calls on Thursday, the county's class action is strikingly similar to the previous two. Among other things, it alleges the firms engaged in a price fixing conspiracy in which they concealed that they met secretly to discuss prices, and "intentionally created the false appearance of competition by engaging in sham auctions in which the results were predetermined."

It is not clear why the county had entered into its own class action. Crystal Martin, an attorney for the Hinds County Board of Supervisors, did not return phone calls on Thursday. In addition, it is unclear why Precious Martin's name is listed among the more than a dozen law firms representing the issuers in the first two suits.

Meanwhile, attorneys at Cohen, Milstein, Hausfeld & Toll PLLC have filed a motion with the U.S. Judicial Panel on Multi-District Litigation, urging it to both transfer and consolidate all of the cases with the federal court here. It has asked the court to allow it to make oral arguments on its motion.

The motion and related memo, on behalf of Fairfax County, Va., the lead issuer in the two earlier lawsuits, argues that transferring the case to the district makes sense because a single court will be more efficient and Washington is more convenient for all parties.

Specifically, the county argues that the district is centrally located along the east coast and is the headquarters for relevant trade associations, such as the International Swaps & Derivatives Association and the American Bankers Association, which represent most of the banks and securities firms named in the suits. It also notes Washington's proximity to the Alexandria, Va.-based Municipal Securities Rulemaking Board.

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