Bankruptcy

WASHINGTON — The American Bar Association’s section on taxation has asked the Treasury Department to clarify a number of points in tax-regulatory guidance of Build America Bonds and other new programs under the ­American Recovery and Reinvestment Act to ensure issuers don’t do ­anything when issuing the bonds or ­spending the proceeds that could jeopardize the federal subsidy on the bonds.

Financial Guaranty Insurance Corp. has been blocked from paying claims until it repairs its tattered finances under an order from New York State regulators.

The chairman of the bond-issuing Michigan State Housing Authority is the target of several lawsuits adding up to more than $100 million, according to a report in the Detroit News this week.

WASHINGTON — Market participants are increasingly concerned about provisions in Senate and House regulatory reform bills that are designed to address the level of sophistication of states and localities that want to engage in over-the-counter derivatives transactions.

CHICAGO — The St. Louis convention center hotel complex now owned by bondholders formally asked late last week to extend the deadline for a payment in lieu of taxes it owes the city at the end of the year to help stave off a shortfall in working capital expected this winter.

CHICAGO — Ohio Attorney General Richard Cordray filed a lawsuit in federal court Friday accusing the three major rating agencies of colluding with banks and issuers of mortgage-backed securities by inflating ratings on the debt, leading to major market losses for investors like Ohio’s pension and retirement funds.

WASHINGTON — State securities regulators reached settlements in principle with Wells Fargo & Co. under which the firm will pay $1.9 million in penalties and buy back about $1.4 billion of illiquid auction-rate securities primarily held by its subsidiaries’ retail customers since early 2008 when the ARS market collapsed.

The Indian Wells, Calif., Redevelopment Agency disclosed late Tuesday that the Internal Revenue Service has initiated an audit of $68 million of tax-allocation bonds it competitively sold in 2006.

The Municipal Securities Rulemaking Board yesterday filed proposed rule changes with the Securities and Exchange Commission that would dictate the priority of retail and other customer orders in primary offerings, as well as dealers’ related record-keeping responsibilities.

A federal judge has scheduled a hearing for Dec. 8 to consider a motion for relief sought by 50 retirees who are suing the city of Prichard, which filed for municipal bankruptcy in October.

BRADENTON, Fla. — Saying that Jefferson County, Ala.’s sewer debt crisis has gone on too long, a grassroots organization of business leaders is trying raise public support to press local politicians and the county’s creditors for a solution.

WASHINGTON — The Obama administration yesterday announced the formation of a multi-agency task force that will investigate and prosecute “significant” financial crimes and civil violations tied to the financial crisis and the government’s economic recovery programs.

WASHINGTON — State and local housing finance agency officials generally applauded the allocations they received from the Treasury Department for the new-issue bond purchase and temporary credit and liquidity programs, saying they were close to what they requested and should boost ailing housing programs.

The Financial Industry Regulatory Authority censured and fined four firms a total of $175,500 for municipal and other rule violations, including $55,000 against Morgan Stanley for failing to report municipal and corporate securities transactions in a timely manner.

The Municipal Securities Rulemaking Board would have more leeway to select members on a 15-member majority-public board under a revised draft of financial regulatory reform legislation released yesterday by the Senate Banking Committee.

SAN FRANCISCO — The Sacramento Municipal Utility District has joined the ranks of public agencies filing civil lawsuits alleging a bid-rigging conspiracy in the municipal derivatives market.

BRADENTON, Fla. — Jefferson County, Ala. on Friday filed a lawsuit against JPMorgan, Blount Parrish & Co., Charles LeCroy, Douglas MacFaddin, Larry Langford, William Blount, and Albert LaPierre for their roles in the county’s $3.2 billion of troubled sewer refinancings and swaps

WASHINGTON — The Securities and Exchange Commission will likely vote to adopt final changes to its Rule 15c2-12 on disclosure “very early” next year and will then meet with lawmakers to see what can be done to expand its authority over the muni market, SEC chairman Mary Schapiro said this week.

WASHINGTON — The Securities and Exchange Commission’s settlement last week with JPMorgan over payments former bankers made to get municipal bond and swap business from Jefferson County, Ala., as well as other recent enforcement actions, show the SEC is not afraid to pursue complex and difficult financial crimes, the agency’s head of enforcement said yesterday.

BRADENTON, Fla. — Former Jefferson County, Ala., commissioner Mary Buckelew will serve no prison time for lying to a grand jury about expensive gifts and spa treatments she received to influence her vote in connection with $3.2 billion of debt and swaps sold for the county’s sewer system.