Law and legal issues

WASHINGTON — The Justice Department Tuesday indicted three former financial services executives — Dominick P. Carollo, Steven E. Goldberg and Peter S. Grimm — on a total of 12 criminal counts for allegedly participating in wire fraud schemes and conspiracies in connection with the bidding for investment contracts for municipal bond proceeds over a seven-year period.

WASHINGTON — The Justice Department today indicted three former financial services executives — Dominick Carollo, Steven Goldberg and Peter Grimm — on 12 criminal counts for participating in wire fraud schemes and conspiracies in connection with the bidding for investment contracts for municipal bond proceeds from as early as 1999 until 2006.

WASHINGTON — The Municipal Securities Rulemaking Board is wrestling with how much it needs to increase its staff, technological capability, and funds to implement provisions of the new financial regulatory reform law that require it to make the most expansive changes since its creation in 1975.

CHICAGO — CIFG Assurance North America Inc. on Monday sued Assured Guaranty Corp., charging it with breach of contract violations for reneging on its obligation to cover the policy on $83.3 million of Xenia Iowa Rural Water District bonds as part of its 19-month-old reinsurance agreement.

ALAMEDA, Calif. — Officials in Modoc County, Calif., scrambled to avoid insolvency last week after years of lax accounting put the government in a $12.5 million financial hole.

It will take five years to turn the new federal financial reform law into rules and regulation, an industry expert from the Securities Industry and Financial Markets Association said last week.

CHICAGO — Closing arguments are scheduled to begin Monday morning in the federal corruption trial of former Illinois Gov. Rod Blagojevich after his defense rested its case last week without calling him to the stand.

The New York State Thruway Authority board last week authorized its executive director to negotiate but not execute on his own a new contract with Hawkins Delafield & Wood LLP, which has been bond counsel for the agency for all of its 60 years of existence.

WASHINGTON — At the request of the Securities and Exchange Commission, the Municipal Securities Rulemaking Board is moving forward with rule changes for priority of orders in primary offerings. The changes are more in line with the original proposal the MSRB floated late last year rather than a pared-down version it agreed to in April.

WASHINGTON — The House ethics committee’s investigative panel is alleging that former Ways and Means Committee chairman Charles Rangel, D-N.Y., has violated ethics rules.

One of Vallejo’s employee unions is continuing its legal fight against the city’s rejection of its contract in bankruptcy court.

WASHINGTON — The Municipal Securities Rulemaking Board is considering temporarily expanding its 15-member board, possibly by two to four members, as it transitions to majority-public membership by Oct. 1 to comply with the new financial regulatory reform law.

WASHINGTON — President Obama yesterday signed into law financial regulatory reform legislation that will make sweeping changes in the municipal and other markets, saying it will prevent a reoccurrence of the “breakdown” that caused the current “severe recession.”

The Securities and Exchange Commission voted unanimously Wednesday to propose new rules designed to revamp the sales and distribution fees some mutual funds charge and to provide better disclosures of them to investors.

CHICAGO — The managers of the bondholder-owned St. Louis convention center hotel complex presented a more upbeat revenue forecast for the facilities in a financial update last week, according to a new investor notice.

WASHINGTON — The Securities and Exchange Commission is considering holding five field hearings between September and January as part of a nationwide inquiry on the municipal market that is expected to lead to recommendations for statutory and regulatory changes to better protect investors.

CHICAGO — A Wisconsin Supreme Court decision overturning the state diversion of $200 million from a medical malpractice fund will force a new round of budget cuts, Gov. Jim Doyle’s administration said Tuesday.

Securities and Exchange Commission chairman Mary Schapiro told lawmakers Tuesday that the agency needs to hire 800 people to implement provisions in the financial regulatory reform legislation that President Obama is expected to sign into law today.

BRADENTON, Fla. — The Securities and Exchange Commission is seeking a summary judgment against former Jefferson County, Ala., commissioner Larry Langford on three counts of violating the federal Securities Act.

CHICAGO — Lawyers for former Illinois Gov. Rod Blagojevich and his older brother Robert launched their defense Monday against allegations the ex-governor sought to use his official powers to personally profit and build his campaign coffers.