Bankruptcy

The Treasury Department's draft derivatives bill contains a technical glitch that renders meaningless a provision that was intended to restrict small municipalities from participating in derivatives transactions, several lawyers said late last week.

WASHINGTON — The Municipal Securities Rulemaking Board has filed a proposed rule change with the Securities and Exchange Commission that would raise the board’s annual fee for municipal securities firms to $500 from $300 on Oct. 1 and generate an additional $280,000 for the board for fiscal year 2010.

WASHINGTON - The first industry groups to comment on two Municipal Securities Rulemaking Board proposals tied to its EMMA disclosure system are warning that they may be unfair or unduly burdensome in certain respects.

BRADENTON, Fla. - Alabama's House yesterday passed a bill authorizing a new occupational tax for Jefferson County and another bill requiring the county to hire a comptroller and a manager.

Public power utilities that issue tax-exempt and taxable debt to finance projects would like the massive climate bill pending in Congress to include tax-exempt, as well as taxable, debt in its credit enhancement provisions. The bill, introduced May 15 and co-sponsored by Reps. Henry A. Waxman, D-Calif., and Edward J. Markey, D-Mass., would create a Clean Energy Deployment Administration that could provide credit support to taxable debt obligations sold by state, local, and private-sector entities to finance "clean energy" projects. The credit enhancement could take the form of direct loans, letters of credit, loan guarantees, insurance, or purchases of debt instruments. The bill is pending in the Senate.

SAN FRANCISCO - Vallejo, Calif.'s public employee unions have given up on getting the city tossed out of bankruptcy court.

The two broker-dealer trade groups are taking opposite stances on the Municipal Securities Rulemaking Board's proposal to require dealers to disclose contributions to bond ballot campaign committees to the MSRB.

WASHINGTON - Several members of the Senate Banking Committee yesterday warned that the Obama administration's proposal to regulate credit rating agencies does not go far enough to ensure the agencies use reliable information to determine ratings.

WASHINGTON - The Securities and Exchange Commission yesterday released its proposed pay-to-play restrictions for investment advisers and has set an Oct. 6 deadline for public comments, including on whether the curbs should be expanded to include contributions to charities and other institutions closely affiliated with elected officials.

BRADENTON, Fla. - The Bank of New York Mellon on Monday filed a civil suit in Alabama state court seeking a receiver for Jefferson County's sewer system as well as a court order requiring county commissioners to raise sewer rates and impose additional charges and fees to pay bondholders.

The Securities Industry and Financial Markets Association has hired former U.S. Rep. Kenneth E. Bentsen Jr. as head of its office here and as executive vice president of public policy and advocacy.

WASHINGTON - The National League of Cities is urging the Treasury Department to purchase "troubled assets" resulting from Lehman Brothers' bankruptcy filing that are still held by local governments.

CHICAGO - The effort to legalize casino gambling in Ohio advanced last week when the state Supreme Court rejected a challenge to a ballot proposal that would allow casinos in the state's four largest cities.

Although some industry officials warn that the Securities and Exchange Commission's proposal to restrict investment advisers from pay-to-play practices would be draconian, an SEC official said yesterday that there does not seem to be an effective alternative.

BRADENTON, Fla. - Albert LaPierre today will enter a guilty plea in Alabama federal court to one count each of conspiracy and filing a false tax return stemming from last December's 101-count, pay-to-play criminal indictment related to Jefferson County, Ala's sewer bond deals.

The financial meltdown in Jefferson County worsened this week with offices in Alabama’s largest county figuring out how to operate without sufficient staff and local lawmakers still disagreeing over how to fix the problem.

By cutting Ambac Assurance Corp.'s financial strength rating to junk this week, Standard & Poor's put almost 26,000 municipal bonds into credit limbo.

SAN FRANCISCO - As California Gov. Arnold Schwarzenegger yesterday signed a series of budget revisions to address the state's deficit and cash-flow troubles, the controller's office continued printing IOUs to pay many of the state's bills.

SAN FRANCISCO - California redevelopment agencies plan to sue to block a $2.05 billion revenue grab that state lawmakers approved Friday as part of a $23.1 billion budget-balancing deal.

WASHINGTON - Market participants have been quick to criticize a bill proposed by Rep. John B. Larson, D-Conn., that would tax municipal and other over-the-counter derivatives, saying that the legislation could freeze the derivatives market by creating prohibitively high costs for such contracts.