Bankruptcy

CHICAGO — Sixteen months after finalizing its agreement to reinsure a portfolio of $13 billion in CIFG Assurance NA-backed bonds, Assured Guaranty Corp. has decided to exclude from the pact the policy covering $83.3 million of debt issued in 2006 by the Xenia Rural Water District in Iowa.

The Financial Industry Regulatory Authority has filed an administrative complaint against David Lerner Associates Inc. and its head trader, William Mason, charging they excessively marked up some 1,538 municipal bond transactions over a two-year period.

A group of 11 California issuers are charging that an affiliate of Goldman Sachs & Co., J Aron & Co., is pressuring a member of the group to remove Goldman as a defendant in its civil suit charging that 36 Wall Street and other firms participated in a vast bid-rigging conspiracy for municipal swaps and investment agreements.

The Securities and Exchange Commission has accused the former manager of two Schroders Investment Management municipal bond mutual funds of tipping his family members about impending distress to the funds and urging them to sell their shares.

Ambac Assurance Corp. will appeal a Nevada bankruptcy judge’s ruling that the Las Vegas Monorail Co. was entitled to file for bankruptcy under Chapter 11.

WASHINGTON — A bond provision in a recently unveiled climate change bill appears to be broader than intended and would allow electric cooperatives and potentially the federal government to serve as conduit borrowers on tax-exempt and Build America Bond deals.

A federal judge in New York Tuesday dismissed a lawsuit filed by the Louisiana Stadium and Exposition District that contended it was sold a worthless bond insurance policy by Financial Guaranty Insurance Co.

A federal judge Wednesday issued a temporary restraining order blocking New York Gov. David Paterson’s plan to save funds by furloughing state employees starting next week. Three unions sued Paterson after the Legislature Monday passed an emergency spending bill that included the furlough plan.

GE Funding Capital Market Services Inc., a subsidiary of General Electric Capital Corp., does not agree with the Securities and Exchange Commission’s plans to file charges against it in connection with an industry-wide investigation of guaranteed investment contracts and derivatives, but is discussing the matter, including a “potential resolution,” with SEC staff.

A Jefferson County circuit court judge last week denied a motion by JPMorgan to dismiss a lawsuit against the investment bank filed by Jefferson County.

BRADENTON, Fla. — The federal judge presiding over the Alabama ­Public School and College Authority’s case that attempts to void a swaption with ­JPMorgan has agreed with a joint request to delay the trial more than four months.

WASHINGTON — An amendment to financial regulatory reform legislation that would impose a broad fiduciary duty on financial services firms when they give advice and recommendations to public entities and pension funds is pitting dealers against advisers in the municipal market.

ALAMEDA, Calif. — A California appeals court has denied a bid by redevelopment advocates for a temporary stay to block implementation of a recent court ruling that allows the state to shift more than $2 billion from local redevelopment agencies to help balance the state budget.

WASHINGTON — The Securities and Exchange Commission is launching a nationwide inquiry into the municipal market that will lead to recommendations for specific statutory and regulatory changes to better protect investors, an SEC official said at the Investment Company Institute general membership meeting here Friday.

WASHINGTON — The Securities and Exchange Commission is launching a nationwide inquiry into the municipal market that will lead to recommendations for specific statutory and regulatory changes to better protect investors, an SEC official said at the Investment Company Institute general membership meeting here Friday.

SANTA ANA PUEBLO, N.M. — Two senators plan to introduce legislation as soon as today to permanently extend a popular provision in last year’s stimulus law that was designed to encourage banks to buy municipal debt from small issuers but would expire at the end of the year without congressional action.

SANTA ANA PUEBLO, N.M. — The National Federation of Municipal Analysts presented awards to the Municipal Securities Rulemaking Board and five individuals last week, including Wisconsin state capital finance director Frank Hoadley and B.C. Ziegler & Co. director of research Ed Merrigan, during its annual conference here.

WASHINGTON — The Financial Industry Regulatory Authority is preparing to take enforcement action against certain firms for selling municipal bonds to retail customers without disclosing material information, including that the bonds’ credit ratings had been spiraling downward, a FINRA official said Thursday.

Pennsylvania officials yesterday weighed in on an initiative to prohibit local governments from using derivatives, with most participants in the public hearing urging greater state regulation and guidelines for such instruments rather than ending swaps at the local level.

CHICAGO — The Minnesota Supreme Court ruled yesterday that Gov. Tim Pawlenty exceeded his executive powers in using his unallotment authority to slash the fiscal 2010-11 budget sent to him by lawmakers last year, a finding that raises questions over the legality of $2.7 billion in spending cuts made by the governor.