Law and legal issues

WASHINGTON — The Securities and Exchange Commission plans to vote on proposed changes to its Rule 15c2-12 on municipal market disclosure at an open meeting May 26, according to a notice the SEC released Tuesday evening.

WASHINGTON — The Senate yesterday voted down an amendment to financial regulatory reform legislation that would have imposed a blanket prohibition on federal assistance to states and localities in financial trouble for reasons other than a natural ­disaster.

The Securities and Exchange Commission should clarify the responsibilities of elected issuer officials who approve or authorize primary offering documents and secondary market disclosures, the National Association of Bond Lawyers said this week.

CHICAGO — Facing insolvency as it struggles with $140 million of debt, the Xenia Rural Water District in Iowa is pinning its hopes on a workout plan that relies on a rate increase and sale of district assets to raise revenue plus $45.4 million in debt relief.

WASHINGTON — As the Senate moves toward finishing consideration of financial regulatory reform legislation this week, state treasurers are making last-minute efforts to change some of the bill’s muni-related derivatives and rating provisions, though it’s unclear if they were making any headway with lawmakers.

CHICAGO — Sixteen months after finalizing its agreement to reinsure a portfolio of $13 billion in CIFG Assurance NA-backed bonds, Assured Guaranty Corp. has decided to exclude from the pact the policy covering $83.3 million of debt issued in 2006 by the Xenia Rural Water District in Iowa.

The Financial Industry Regulatory Authority has filed an administrative complaint against David Lerner Associates Inc. and its head trader, William Mason, charging they excessively marked up some 1,538 municipal bond transactions over a two-year period.

A group of 11 California issuers are charging that an affiliate of Goldman Sachs & Co., J Aron & Co., is pressuring a member of the group to remove Goldman as a defendant in its civil suit charging that 36 Wall Street and other firms participated in a vast bid-rigging conspiracy for municipal swaps and investment agreements.

The Securities and Exchange Commission has accused the former manager of two Schroders Investment Management municipal bond mutual funds of tipping his family members about impending distress to the funds and urging them to sell their shares.

Ambac Assurance Corp. will appeal a Nevada bankruptcy judge’s ruling that the Las Vegas Monorail Co. was entitled to file for bankruptcy under Chapter 11.

WASHINGTON — A bond provision in a recently unveiled climate change bill appears to be broader than intended and would allow electric cooperatives and potentially the federal government to serve as conduit borrowers on tax-exempt and Build America Bond deals.

A federal judge in New York Tuesday dismissed a lawsuit filed by the Louisiana Stadium and Exposition District that contended it was sold a worthless bond insurance policy by Financial Guaranty Insurance Co.

A federal judge Wednesday issued a temporary restraining order blocking New York Gov. David Paterson’s plan to save funds by furloughing state employees starting next week. Three unions sued Paterson after the Legislature Monday passed an emergency spending bill that included the furlough plan.

GE Funding Capital Market Services Inc., a subsidiary of General Electric Capital Corp., does not agree with the Securities and Exchange Commission’s plans to file charges against it in connection with an industry-wide investigation of guaranteed investment contracts and derivatives, but is discussing the matter, including a “potential resolution,” with SEC staff.

A Jefferson County circuit court judge last week denied a motion by JPMorgan to dismiss a lawsuit against the investment bank filed by Jefferson County.

BRADENTON, Fla. — The federal judge presiding over the Alabama ­Public School and College Authority’s case that attempts to void a swaption with ­JPMorgan has agreed with a joint request to delay the trial more than four months.

WASHINGTON — An amendment to financial regulatory reform legislation that would impose a broad fiduciary duty on financial services firms when they give advice and recommendations to public entities and pension funds is pitting dealers against advisers in the municipal market.

ALAMEDA, Calif. — A California appeals court has denied a bid by redevelopment advocates for a temporary stay to block implementation of a recent court ruling that allows the state to shift more than $2 billion from local redevelopment agencies to help balance the state budget.

WASHINGTON — The Securities and Exchange Commission is launching a nationwide inquiry into the municipal market that will lead to recommendations for specific statutory and regulatory changes to better protect investors, an SEC official said at the Investment Company Institute general membership meeting here Friday.

WASHINGTON — The Securities and Exchange Commission is launching a nationwide inquiry into the municipal market that will lead to recommendations for specific statutory and regulatory changes to better protect investors, an SEC official said at the Investment Company Institute general membership meeting here Friday.