Law and legal issues

WASHINGTON — UBS Financial Services Inc. has agreed to pay more than $160 million to settle antitrust, securities fraud, tax and other charges with three federal agencies and 25 state attorneys general for rigging bids for at least 100 reinvestment transactions in 36 states, threatening the tax-exempt status of more than $16.5 billion of municipal bonds.

CHICAGO — The Xenia Rural Water District’s financial position worsened in 2010, moving it closer to insolvency and increasing the pressure on the Iowa agency and its creditors to come to some agreement that likely includes debt forgiveness, according to a state audit.

Detroit Mayor Dave Bing met with Michigan Gov. Rick Snyder and legislators last week to push a deficit-elimination plan that hinges on the passage of new state laws.

CHICAGO — Indiana legislators last week passed a $28 billion two-year general fund budget and several bond-related bills but failed to pass a controversial measure allowing fiscally distressed municipalities to file for bankruptcy.

The Securities Industry and Financial Markets’ Association is urging the Municipal Securities Rulemaking Board to withdraw its draft broker’s brokers rule and leave the existing regulatory and enforcement scheme intact.

Whether the New York Insurance Department can appeal a ruling that ordered it to hand over e-mails and documents regarding the restructuring of bond insurer MBIA Insurance Corp. could be decided soon.

WASHINGTON — With financial regulators combing through pension reporting by state and local governments, the National Association of Bond Lawyers unveiled guidance Monday to boost issuers’ disclosure practices.

SAN FRANCISCO — The restructuring of $2 billion of San Joaquin Hills toll-road debt appears to have bondholders on board since the alternative is a likely default.

The board of the bankrupt Sierra Kings Healthcare District in California earlier this month approved a letter of intent to join Adventist Health.

CHICAGO — Michigan Gov. Rick Snyder warned Wednesday that 23 school districts across the state, most clustered around the Detroit area, qualify for a state takeover under its new emergency financial management law.

CHICAGO — Illinois could end the fiscal year owing more than $8 billion in bills, a level that underscores the need to cut spending in order to stabilize its balance sheet, Comptroller Judy Baar Topinka warned Wednesday.

The Municipal Securities Rulemaking Board has filed a rule change with the Securities and Exchange Commission that increases the price of a one-year historical transaction-data report to $2,500 from $600.

Under fire from congressional Republicans to slow down derivatives rulemaking, the Commodity Futures Trading Commission voted Wednesday to reopen and extend by 30 days the public comment period on proposed derivatives rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act.

WASHINGTON — This year will be the “toughest year so far” for state and local governments since the economic plunge began in 2008, with rating downgrades expected to outnumber upgrades, according to Moody’s Investors Service.

WASHINGTON — Market participants slammed the Municipal Securities Rulemaking Board’s new draft Rule G-43 for broker’s brokers, calling it everything from irresponsible to anti-competitive.

SAN FRANCISCO — Vallejo’s steep road out of bankruptcy has begun to level off, after one of its strongest opponents stopped fighting the California city’s plan to exit bankruptcy.

SAN FRANCISCO — The city of Montebello in Los Angeles County, with more than $100 million in debt, may go bankrupt if it is unable to get a bridge loan in the next six months, according to a city official.

DALLAS — Seeking to forestall default on $127 million of stadium bonds, the Harris County Houston Sports Authority is challenging a UBS Investment Bank demand for a $26.75 million swap termination fee issued last week.

BRADENTON, Fla. — The Connector 2000 Association Inc. was expected to begin the exchange of restructured bonds on Monday as part of the South Carolina toll road operator’s bankruptcy plan, which went into effect last week.

With an airline lawsuit behind it and structural tinkering completed, Chicago will enter the market this week with $1.1 billion of mostly new-money revenue bonds to finance the next phase of projects under an $8 billion expansion program at O'Hare International Airport.