Law and legal issues

WASHINGTON — The Connector 2000 Association Inc., the troubled South Carolina toll road that went into default on Jan. 1, filed for bankruptcy on Thursday.

WASHINGTON — The Supreme Court yesterday ruled that “honest services” fraud — a criminal statute that has been used to prosecute wrongdoing in the municipal market — is limited to bribery and kickback schemes.

The Municipal Securities Rulemaking Board launched a redesigned website this week with new content and features, better navigation, and a contemporary style that aims to provide improved access to information about MSRB rules, market disclosures, and data collected and disseminated by the board.

WASHINGTON — The inclusion of a free, real-time feed of municipal bond ratings on the Electronic Municipal Market Access system has long been a goal of the Municipal Securities Rulemaking Board, which operates the disclosure and transparency portal.

U.S. attorneys last week filed a motion to dismiss the federal lawsuit filed in March by Florida Attorney General Bill McCollum challenging the massive health care reform bill.

Assured Guaranty last week filed a civil suit in New York alleging that JPMorgan, along with Jefferson County, "fraudulently induced" it to provide more than $378 million in insurance coverage for the county's nearly $3.2 billion of variable- and auction-rate sewer warrants.

Former Jefferson County commissioner Larry Langford has lost another bid to remain free while appealing his corruption conviction on pay-to-play charges related to the county's failed sewer warrants.

The two Democrats leading the House-Senate conference working to hammer out a single financial regulatory reform bill stressed yesterday that conferees need to wrap up their work by tomorrow to ensure passage of the bill through each chamber next week, before lawmakers break for the July 4 recess.

CHICAGO — The Securities and Exchange Commission has launched a review of a failed investment by five southeastern Wisconsin school districts in collateralized debt obligations that were intended to establish trusts to pay the districts’ non-pension retiree health care benefits.

BRADENTON, Fla. — Homebuyers either are shying away from buying homes on the beach or requiring a 60-day guarantee that the oil will not affect the beach before signing real estate contracts, a Naples, Fla., Realtor claimed in a federal lawsuit filed Thursday.

The insolvent city of Central Falls, R.I., will transition from judicially appointed receivership to state receivership under a consent order granted Friday in Superior Court.

The Perth Amboy Board of Education is unlikely to appeal last week’s Appellate Court decision that upheld New Jersey Gov. Chris Christie’s executive order requiring school districts to use surplus funds to offset cuts in state aid, the board’s superintendant said.

WASHINGTON — A Republican proposal that would have allowed the Build America Bond program to expire at the end of the year was defeated yesterday, as Senate lawmakers continued working toward passing legislation to extend several expiring tax breaks, including for BABs.

WASHINGTON — House and Senate conferees meeting to hammer out a financial regulatory reform bill appear to have reached an agreement that would allow the Municipal Securities Rulemaking Board to regulate financial advisers and other market intermediaries.

ALAMEDA, Calif. — Four unions representing California state employees agreed to contracts that require workers to contribute more to their pensions and provide less generous benefits to future hires, Gov. Arnold Schwarzenegger announced Wednesday afternoon.

A bill designed to make it harder for California cities and local agencies to file for Chapter 9 municipal bankruptcy has been put on the shelf, at least for now.

The San Diego mayor’s office has an emphatic response to a recent report advising the city to explore the bankruptcy process as an avenue to reduce its pension and employee retirement liabilities.

Mercer LLC will pay the Alaska Retirement Management Board $500 million to settle a lawsuit accusing the firm of negligence that contributed to the multi-billion unfunded liabilities of the state’s employee pension funds.

CHICAGO — Prosecutors in the federal corruption trial of former Illinois Gov. Rod Blagojevich sought in testimony this week to link a loan to businessman Joseph Aramanda from consultant Robert Kjellander to an alleged scheme by Blagojevich and three associates to personally profit from the state’s $10 billion pension bond sale.

WASHINGTON — The Securities and Exchange Commission is stepping up its enforcement efforts in the municipal securities market for the first time in more than a decade, with a staff of roughly 30 attorneys charged with investigating and trying muni and public pension fund cases.