Law and legal issues

WASHINGTON — The Municipal Securities Rulemaking Board issued draft amendments to its Rule G-20 on Tuesday that generally would bar muni advisers from giving gifts and gratuities in excess of $100 per year to individuals or entities who could influence the award of advisory business.

A hearing has been pushed back a week to March 1 on Chicago's motion asking a Cook County Circuit Court judge to dismiss a suit challenging the city's authority to proceed with $3.36 billion worth of expansion projects at O'Hare International Airport without airline approval.

CHICAGO — Menasha would pay holders of $23 million of defaulted steam-plant bond anticipation notes $17.5 million under a proposed cash settlement that would end bondholder litigation and put the Wisconsin city on a path towards rebuilding its credit.

The chances that Ambac Assurance Corp. will be able to keep $700 million of disputed tax refunds increased last week when a federal court in Wisconsin again threw out the Internal Revenue Service’s case against the bond insurer.

A New York State judge on Friday temporarily blocked a key provision of a control board’s takeover of Nassau County’s finances.

The municipal bond insurance industry would still be thriving today if big banks hadn’t defrauded the insurers.

SAN FRANCISCO — Southern California’s Borrego Water District has defaulted on $9.5 million of special-tax bonds owned by Nuveen Asset Management.

Senate Banking Committee Republicans worry Securities and Exchange Commission chairman Mary Schapiro and other regulators are rushing to implement rules mandated by the Dodd-Frank Act without sufficient regard to cost-benefit analyses or public comments.

The Financial Industry Regulatory Authority censured and fined Wells Fargo Advisors LLC $12,500 for failing to provide customers and the Municipal Securities Rulemaking Board with correct yield information from muni securities transactions.

WASHINGTON — Just one day after the Municipal Securities Rulemaking Board issued a draft rule on muni advisers’ fiduciary duties, market participants are questioning the scope of the rule and whether it would apply to brokers engaged in certain activities such as recommending securities in which states and localities could invest general funds.

WASHINGTON — The chairman of the House Judiciary Committee said on Monday that while he remains open to exploring how Congress may play a role in restoring fiscal sanity to state and local government budgets, he does not believe Washington should dictate public pension standards or allow states to seek bankruptcy protection.

An Arizona judge ruled Friday that a ballot proposition approved by voters in 2000 requests, but does not require, that the Legislature adjust its annual allocation formula for state aid to local school districts for inflation.

WASHINGTON — As a House Judiciary Committee panel meets Monday to hold a hearing on public pensions and the need for state bankruptcy protection, pension and muni bond experts are opposing a recently introduced bill that would prohibit them from issuing tax-exempt bonds unless they subject their pension plans to federal oversight and regulation.

Pennsylvania Gov. Tom Corbett last week selected Linda Kelly to succeed him as attorney general.

The Nassau County Interim Finance Authority argued that Nassau County’s motion for preliminary injunction to block a takeover of its finances should be denied, according to court filings.

Moody’s Investors Service revised its outlook on bonds that financed the Mets’ stadium in Queens, N.Y., to negative last week, citing pending litigation.

WASHINGTON — House panel members on Wednesday opposed federal bailouts for municipal governments and were reluctant to provide states with bankruptcy protection, but they seemed to support requiring improved public pension fund disclosure.

The Municipal Securities Rulemaking Board filed amendments to its Rule G-23 with the Securities and Exchange Commission on Wednesday that would prohibit dealer-financial advisers from switching roles and becoming underwriters in the same municipal securities transactions.

CHICAGO — Detroit Public Schools’ emergency financial manager Robert Bobb is pushing Michigan lawmakers to enact a bill that would insulate a chunk of the district’s debt from bankruptcy to address concerns by the debt’s bond insurer.

The Connector 2000 Association Inc., a beleaguered Greenville, S.C., toll road operator that a year ago defaulted on $329 million of bonds, needs bondholders to approve a tentative restructuring plan to exit bankruptcy.