Bankruptcy

CHICAGO - A federal judge has appointed Michigan lead plaintiff representing stock- and bondholders in a class action lawsuit seeking to recover losses from investments in insurance giant American International Group Inc.

WASHINGTON - The Municipal Securities Rulemaking Board yesterday asked the Securities and Exchange Commission to approve rule changes that would allow it to begin fully operating primary market disclosure and trade price transparency systems on its EMMA site around May 11, culminating years of work to move to an all-electronic system for the primary market.

WASHINGTON - The Financial Industry Regulatory Authority has fined 25 broker-dealers, including J.J.B. Hilliard, W.L. Lyons Inc., nearly $2.15 million for failing to take timely or proper compliance action with regard to breakpoint discounts on mutual fund shares.

BRADENTON, Fla. - Georgia Secretary of State Karen Handel announced Thursday that investment banks will pay the state $8.5 million in fines in conjunction with auction-rate securities sold to individual, business, and institutional investors.

Settlement payments that back tobacco bonds would be cut by $160 million over a four-year period if the House approves a bill as early as this week, according to the Congressional Budget Office. But market participants think the legislation would not hurt, and possibly could even slightly benefit, tobacco bonds.

WASHINGTON - House lawmakers, in letters to federal regulators and legislation expected to be introduced today, are making a major push to help the municipal market, particularly for short-term instruments that issuers have struggled to sell.

CHICAGO - Michigan officials will take over the finances of Pontiac starting today following a state review board's determination that the troubled city was not taking adequate steps to address its "serious financial problems."

SAN FRANCISCO — Experts say a federal court ruling that may allow Vallejo, Calif., to escape its labor contracts could make bankruptcy a much more tempting option for municipalities and is likely to be upheld by higher courts.

WASHINGTON - The Investment Company Institute, which represents mutual funds and other investment companies, is pushing for a series of regulatory changes to make money market funds more liquid and transparent, as Obama administration advisers push for more sweeping changes to the industry.

BRADENTON, Fla. - Alabama Sen. Scott Beason is shepherding a bipartisan group of lawmakers hoping to move legislation forward that would resolve the financial crisis surrounding Jefferson County's troubled sewer system.

CHICAGO - After years of financial problems, Ohio's Forum Health this week filed for Chapter 11 bankruptcy, leaving uncertain how much bondholders would ultimately recover as the system moves through the reorganization process.

Congress should allow the Securities and Exchange Commission to set capital standards for large broker-dealer holding companies not affiliated with banks and to examine and obtain information about their affiliates, the director of the SEC's trading and markets division said yesterday.

SAN FRANCISCO - The Nevada Supreme Court will hear a case brought by opponents of the Las Vegas Redevelopment Agency who want to place a measure on the ballot that the city attorney has said could eviscerate the agency and its bondholders.

WASHINGTON - The Financial Industry Regulatory Authority fined Citigroup Global Markets $2 million yesterday for a series of multi-year trade reporting violations that included stocks, corporate debt, and more than 480,000 municipal transactions.

DALLAS - Wachovia Securities must repurchase all of the auction-rate securities sold in Texas by June and pay a $3.98 million fine under a final settlement order with state Securities Commissioner Denise Voigt Crawford.

Robert J. Bradbury, former chairman and chief executive officer of the now-defunct underwriting firm Dolphin & Bradbury Inc., pleaded guilty to one criminal count of securities fraud yesterday after selling four Pennsylvania school districts unsuitably risky notes to finance a failed golf course and causing them to lose more than $10 million.

WASHINGTON - House Financial Services Committee chairman Barney Frank is exploring the idea of including a provision in the expansive muni bill his staff is drafting that would require the federal regulation of financial or investment advisers in the municipal market that are not currently regulated, a senior committee staff member said yesterday.

BRADENTON, Fla. - Amid a federal corruption scandal related to bond financings in Palm Beach County, Fla., a local official is suggesting that underwriting firms be selected competitively as opposed to the long-held practice of commissioners selecting the firms that will sell the triple-A rated county's debt.

SAN FRANCISCO - U.S. Bankruptcy Court Judge Michael McManus said late Friday that Vallejo, Calif., can use Chapter 9 bankruptcy protection to reject its collective bargaining agreements.

BRADENTON, Fla. - Jefferson County, Ala. has been notified that JPMorgan and Bear Stearns & Co. terminated swaps related to the county's troubled sewer debt on March 3.