Bankruptcy

WASHINGTON - The Securities and Exchange Commission should expand to municipal bonds and other securities the rules it proposed last year to enhance the transparency and limit conflicts of interest for structured products' ratings, securities industry and mutual fund trade groups told the SEC.

CHICAGO - A government reform commission established by Illinois Gov. Patrick Quinn yesterday proposed capping all campaign contributions, banning contributions from lobbyists, and extending a ban on contributions from large state contractors to General Assembly members.

Erik Sirri, the director of the Securities and Exchange Commission's division of trading and markets, will leave at the end of the month to return to academia, the SEC announced yesterday.

BRADENTON, Fla. - Former Florida-based investment banker Kevin McCarty Friday was sentenced to eight months in federal prison for failing to report his wife's illegal acts, which included using her influence as a Palm Beach County commissioner to steer bond business to the firms for which her husband worked.

CHICAGO - Chicago, Cook County, and five other local governments entered fiscal 2008 with $17.1 billion of unfunded pension liabilities, leaving them poorly positioned to cope with the steep losses of last year due to the market's crash, a local government watchdog group warned yesterday.

Senate Banking Committee chairman Christopher Dodd and House Financial Services Committee chairman Barney Frank yesterday pledged to cooperate with the Obama administration to enact legislation to "create a new, more robust" financial regulatory system by the end of the year.

WASHINGTON - The Municipal Securities Rulemaking Board later this week is expected to explore the possibility of consolidating the final two phases of its transparency system for short-term debt as well as providing more information about issuers' underlying credit ratings to investors.

BRADENTON, Fla. - A federal judge in Alabama last week indicated he's unlikely to decide immediately about whether to appoint a receiver to oversee Jefferson County's sewer system. Also last week, several state lawmakers offered up legislation aimed at helping the troubled county refinance its massive sewer debt load.

SAN FRANCISCO - The lawyers representing Vallejo, Calif., in its Chapter 9 bankruptcy case have a message for municipalities considering bankruptcy: It's no get-out-of-debt-free card.

The House and Senate budget committees yesterday began laying the groundwork for federal spending for the next five years, although any budget resolution resulting from the proposals in both chambers would not set legislative specifics and would only be intended as a blueprint.

WASHINGTON - The Municipal Securities Rulemaking Board yesterday asked the Securities and Exchange Commission to approve a continuing disclosure pilot phase for its EMMA site starting on or around May 11.

BRADENTON, Fla. - Alabama Gov. Bob Riley is once again asking the federal government to help Jefferson County restructure its $3.2 billion of troubled sewer debt.

DALLAS - A bill setting the first limits on campaign contributions in New Mexico is awaiting the signature of Gov. Bill Richardson, who is defending himself against claims of receiving "pay-to-play" money from the bond industry.

WASHINGTON - The Treasury Department proposed legislation yesterday that would allow the federal government to prevent the failure of large non-bank financial companies in severe distress that pose systemic risks to the economy, including those with municipal securities divisions. But it was not clear if the legislation would cover bond insurers, and market participants said it raised constitutional and other questions.

BRADENTON, Fla. - Two Jefferson County, Ala., commissioners yesterday again urged the county to for file municipal bankruptcy as it attempts to keep delaying a federal hearing that would determine if its debt-ridden sewer system should be place under the control of a receiver.

Congress should impose a fiduciary duty on all financial professionals who give investment advice regarding securities rather than settle for the plain-English, fair-dealing standard proposed by the securities industry, three groups said in a letter this week to lawmakers.

SAN FRANCISCO - U.S. Bankruptcy Court Judge Michael McManus pushed Vallejo, Calif., and its public employee unions to finalize negotiations on new contracts before he has to decide whether the city can reject its labor agreements.

If Congress decides to legislatively authorize federal regulation of independent, unregulated financial advisers, it should recognize that there are "fundamental differences" between them and dealer-affiliated advisers, the National Association of Independent Public Finance Advisers said in a recent letter to lawmakers.

The Financial Industry Regulatory Authority yesterday announced that it fined Wachovia Securities LLC and First Clearing LLC $1.1 million for failing to provide more than 800,000 notifications to muni bond and other investors over a five-year period ending in 2008.

WASHINGTON - The Securities and Exchange Commission yesterday announced panelists and the agenda for its April 15 roundtable on how to improve federal oversight and regulation of the credit rating agencies.