ALAMEDA, Calif. — The ranks of California issuers filing civil suits in connection with an alleged bid-rigging conspiracy for guaranteed investment contracts continues to grow.
Last week, five California issuers filed suit in federal court, joining a case brought by 11 others from the state seeking damages from more than two dozen firms accused of participating in an alleged conspiracy to rig bids for municipal investment contracts and derivatives.
San Jose, the East Bay Municipal Utilities District, Richmond, Redwood City, and the San Francisco Redevelopment Agency filed suit last week in U.S. District Court for the Northern District of California.
They bringing the same complaints brought by the 11 other issuers, according to Nanci Nishimura, attorney for Cotchett, Pitre & McCarthy, one of the firms representing the issuers. More are coming, she added.
“All of these public entities in California and nationwide suffered at the hands of this municipal bid-rigging,” she said.
The cases will be consolidated in and coordinated with the other 11 cases Nishimura’s firm is handling, and two other groups of civil cases, in federal court in New York. Among those two other groups are separate cases brought by four California issuers.
The civil cases are fueled by revelations made in connection with criminal charges originally filed by the Justice Department against CDR Financial Products and three of its executives related to bid-rigging for GICs.
The criminal case has so far resulted in guilty pleas from four men.
“What it says,” Nishimura said of the guilty pleas, “is that the Department of Justice is taking this case seriously and people should be watching this.”