Law and legal issues

WASHINGTON Three former officials from CDR Financial Products Inc. are urging a federal judge to dismiss the Justice Department’s charges against them, arguing prosecutors should not proceed to trial on a fraud theory the Supreme Court rejected last year.

CHICAGO — The Metropolitan St. Louis Sewer District has submitted a proposal to its rate-setting commission asking voters for authority to issue $945 million of bonds in coming years to fund capital projects, many of which are required under a tentative $4.7 billion agreement reached with federal authorities to settle a lawsuit.

SAN FRANCISCO — Stockton may not exactly be the next Vallejo, but similarities between the two California cities have started people talking.

Regulators denied Ambac Assurance Corp.’s requests that it be allowed to pay interest on all its outstanding surplus notes due June 7.

CHICAGO — The St. Paul Port Authority and lawyers for a group of investors who hold a portion of its 876 Fund economic development revenue bonds will return to court later this month as litigation proceeds over the fate of $51 million of defaulted debt.

CHICAGO — Former Chicago Mayor Richard Daley has joined Katten Muchin Rosenman LLP — the top-ranked legal firm for city bond deals ­­— in an of counsel role in which the firm intends to draw on his experience and relationships to bolster its continued growth, officials announced Wednesday.

An attorney representing banks holding MBIA Insurance policies guaranteeing structured finance products argued Tuesday that the $5 billion restructuring of MBIA’s insurance subsidiary was done without giving a group of policy-owning banks a chance to object.

BRADENTON, Fla. — Less than 30 days remain before an expected payment default on the bonds issued by the Santa Rosa Bay Bridge Authority to build the tolled 3.5-mile-long Garcon Point Bridge in northern Florida.

SAN FRANCISCO — A federal judge in California has ruled that the city of Alameda did not commit securities fraud in a deal with Nuveen Investments even if it may have intentionally misled bondholders.

Democratic legislators filed two suits last week in an effort to overturn as unconstitutional New Mexico Gov. Susana Martinez’s line-item vetoes of two bills. The lawsuits were filed with the state Supreme Court on May 25.

Fitch Ratings said in a report this week that California’s financial future remains clouded despite recent budget progress.

San Jose Mayor Chuck Reed has called on the City Council to declare a fiscal emergency in an effort to reduce pension and retiree health benefits.

CHICAGO — A Wisconsin judge on Thursday struck down the state’s controversial law that curtailed the collective bargaining powers of most public unions and raised pension contributions and health care premiums, concluding that lawmakers violated state open-meetings rules in their haste to pass the legislation.

The Municipal Securities Rulemaking Board released a draft of Rule G-44 Wednesday that would require municipal advisers to put in place supervisory systems to ensure they comply with Securities and Exchange Commission and MSRB rules.

Lawyers for Ambac Financial Group said the bankruptcy plan submitted by the Wisconsin insurance regulator was unacceptable, and the company intends to issue its own plan in June.

New Jersey Gov. Chris Christie Tuesday directed the Legislature to find $500 million of additional school spending in his fiscal 2012 budget after the state Supreme Court ruled that his proposed funding for schools is unconstitutional.

DALLAS — Harris County, Texas, has asked five law firms involved with 30 county bond issues over three years to return $300,586 of undocumented travel and entertainment expenses.

DALLAS — Colorado’s Taxpayer Bill of Rights, which limits the ability of state and local government to raise taxes and issue debt, violates the U.S. Constitution, according to a lawsuit seeking to overturn the voter-approved law.

SAN FRANCISCO — A California lawmaker has called for an audit of two of the state’s largest third-party bond issuers, citing concerns about transparency, conflicts of interest and public benefit.

WASHINGTON — The Municipal Securities Rulemaking Board plans to file revised amendments to its Rule G-20 with the Securities and Exchange Commission in June that will clarify proposed restrictions on gifts and gratuities for muni advisers would be virtually the same as those for broker-dealers, MSRB officials said Monday.