Law and legal issues

Arbitration panels for the Financial Industry Regulatory Authority have ordered Citigroup to pay roughly $2.2 million to investors who lost money in one of the bank’s municipal bond arbitrage vehicles.

ALAMEDA, Calif. — A California Senate committee has approved a watered-down version of a bill designed to make it harder for cities or other local agencies to file for Chapter 9 municipal bankruptcy.

A state court on Wednesday allowed the Wisconsin insurance commissioner to proceed with his plan to allow bond insurer Ambac Assurance Corp. to imminently settle claims owed to major banks on structured finance product transactions.

Holders of Central Falls, R.I., debt will get paid — at least that’s the plan, according to the court-appointed temporary receiver who is now running things.

WASHINGTON — The Securities and Exchange Commission Wednesday unanimously approved amendments to its Rule 15c2-12 on disclosure that, like the ones proposed in July, will increase the quantity and timeliness of municipal issuers’ continuing disclosures.

Alabama federal Judge Scott Coogler last week denied a request from Montgomery bond dealer Bill Blount that Coogler reconsider his order denying Blount more time to report to prison so he could continue working on a $1 million forfeiture as part of his plea bargain.

CHICAGO — The trustee who represents owners of $46.6 million of taxable tribal gaming revenue bonds issued for the Lac du Flambeau tribe in Wisconsin is appealing a federal judge’s ruling that the tribe is not responsible for repaying the debt because the trust indenture’s structure required federal approval.

WASHINGTON — As the two chambers of Congress begin to hammer out a single financial regulatory reform bill over the next several weeks, industry groups have mixed views about a provision in the Senate bill that would prohibit banks from engaging in proprietary trading but exclude municipal, Treasury and federal agency securities from the ban.

ALAMEDA, Calif. — The ranks of California issuers filing civil suits in connection with an alleged bid-rigging conspiracy for guaranteed investment contracts continues to grow.

The Harrisburg Authority will miss a $3.2 million June 1 payment to bondholders of incinerator debt sold in 2003 that helped finance upgrades to the Pennsylvania facility.

The Financial Industry Regulatory Authority has censured and fined Piper ­Jaffray & Co. $700,000 for failing to retain about 4.3 million e-mails over a six-year period and for not alerting FINRA that it was having problems with its e-mail retention and retrieval.

WASHINGTON — The recovery zone bond program would double in size to $50 billion and Build America Bonds could be used to do current refundings of existing BABs under a new tax and jobs bill released late Thursday evening by leaders of the House and Senate tax-writing committees.

WASHINGTON — As lawmakers in the Senate and House begin to resolve the differences in their separate financial regulatory reform bills this week, market participants are hoping the finished product will exclude several controversial provisions they say could eliminate the municipal derivatives market.

WASHINGTON — The Municipal Securities Rulemaking Board yesterday filed a request with the Securities and Exchange Commission to allow it to post credit ratings directly on the board’s Electronic Municipal Market Access site.

WASHINGTON — A fourth market participant, Mark Zaino, has pleaded guilty to participating in bid-rigging and fraud conspiracies in connection with municipal investment contracts and derivatives, the Justice Department announced yesterday.

Two bond-issuing authorities in Virginia entered into a voluntary closing agreement with the Internal Revenue Service to preserve the status of $74.3 million of bonds after one of them sold its waste-to-energy facilities, which were financed with the bonds, to Wheelabrator Portsmouth Inc.

The Securities and Exchange Commission plans to vote on proposed changes to its Rule 15c2-12 on disclosure at an open meeting Wednesday and also may direct staff to approve a related Municipal Securities Rulemaking Board proposal the same day.

Florida Attorney General Bill McCollum Friday amended the federal lawsuit he filed challenging the constitutionality of the new health care law to add seven new states, including Georgia and Mississippi, the National Federation of Independent Business, and two individuals.

An Alabama judge last week denied Montgomery bond dealer Bill Blount’s request for more time to report to prison so he can work to submit the $1 million forfeiture required as part of his conviction on pay-to-play charges centering on Jefferson County’s sewer bond deals.

The 11th Circuit Court of Appeals in Atlanta last week upheld the convictions of former Jefferson County Commissioner Chris McNair and Jack Swann, who oversaw the department in charge of rebuilding the county’s financially troubled sewer system.