Bankruptcy

WASHINGTON — Several derivatives market participants attending a federal roundtable here were supportive of a lag in the reporting of large or “block” over-the-counter derivative transactions that can move the market, but they were not sure how much of a delay would be reasonable.

Fearing a national precedent may be set that could affect billions of dollars of municipal debt across the country, the National Federation of Municipal Analysts has filed a brief in Vallejo, Calif.’s bankruptcy case.

WASHINGTON — Market participants are concerned that issuers of draw-down bonds with tax benefits provided by temporary stimulus provisions could lose some benefits if the provisions expire at the end of the year as scheduled.

WASHINGTON — Market participants attending a federal roundtable here Tuesday are expected to raise concerns about price reporting requirements for dealer counterparties to municipal swaps that will be proposed in coming months by the Commodity Futures Trading Commission.

Parking garages serving the new Yankee Stadium in the Bronx are headed for default on $237.6 million of tax-exempt bonds due to low usage in the face of cheaper alternatives, the borrower disclosed last month.

As litigation began Monday against the city of Harrisburg and the Harrisburg Authority, other Pennsylvania municipal governments are facing similar fiscal woes — rising labor costs and sluggish revenue streams.

Assured Guaranty’s chief executive officer said while the outlook for new municipal bond insurers isn’t good, the industry’s alleged problems with existing portfolios are overblown and unsupported by recent data.

WASHINGTON — Douglas Lee Campbell, a former senior vice president and marketer in Bank of America’s municipal derivatives group, pleaded guilty Thursday to three criminal counts for engaging in bid-rigging and fraud conspiracies connected with guaranteed investment contract and other municipal finance agreements.

Harrisburg and Pennsylvania officials are working on securing a potential bank loan so the city can meet a $3.3 million debt-service payment due Sept. 15 and avoid a default.

New Jersey Attorney General Paula T. Dow Thursday announced that JPMorgan will pay the state $1.1 million and buy back auction-rate securities from New Jersey investors to resolve allegations that the bank failed to disclose the risks involved with the ARS market.

WASHINGTON — The Municipal Securities Rulemaking Board has issued draft guidance warning broker’s brokers of their obligations under its rules following recent enforcement actions by the Securities Exchange Commission and the Financial Industry Regulatory Authority alleging rule violations.

DALLAS — Houston’s transportation authority, Metro, faces delays and growing costs on a $1.5 billion light-rail expansion after its purchase of 103 rail cars from a Spanish manufacturer was found to violate federal law.

WASHINGTON — Adrian Scott-Jones, a former agent of a Florida-based guaranteed investment contract broker, pleaded guilty to two separate fraud conspiracies in connection with the brokering of GICs in the municipal market.

A grand-slam judgment last month has emboldened the lawyers and investors seeking to recoup losses on $2 billion in municipal arbitrage funds run by Citigroup.

CHICAGO — Investors who hold $23 million of defaulted steam-plant bond anticipation notes, which the city of Menasha put its appropriation pledge behind, warned in their latest court filing that the municipal world is following their federal lawsuit and their claims the Wisconsin city misled potential investors.

The North Shore Long Island Jewish Health System Inc. has agreed to pay $3 million to settle a civil fraud lawsuit in a deal the U.S. attorney’s office announced Tuesday.

WASHINGTON — The Securities and Exchange Commission will kick off its much-awaited series of hearings on the municipal market this month, holding the first on Tuesday, Sept. 21, in San Francisco.

Harrisburg’s debt woes are exacerbated by the political impasse between Mayor Linda Thompson and the City Council, which could hinder its ability to utilize the capital market in the future, according to a Moody’s Investors Service analysis of Pennsylvania’s capital city.

BRADENTON, Fla. — Alabama Circuit Court Judge Albert Johnson ruled Tuesday that he would appoint a receiver to take over Jefferson County’s sewer system, which is saddled with nearly $3.2 billion of variable- and auction-rate warrants.

Michigan Democratic gubernatorial candidate and Lansing Mayor Virg Bernero said last week that he would stop doing business with Wall Street banks that won’t participate in the state’s foreclosure program.