Law and legal issues

WASHINGTON — Senate Democrats Tuesday failed for the second straight day to garner the 60 votes they needed to move forward with consideration of a massive financial regulatory reform bill by the full Senate.

A federal judge in Manhattan has refused to dismiss lawsuits four California issuers filed against Wells Fargo & Co., JPMorgan, and other banks, broker-dealers, and investment brokers, charging they conspired to rig bids and fix prices of guaranteed investment and derivatives contracts in the municipal market.

The National Association of Bond Lawyers is urging Congress to fix a number of glitches and provisions with unintended consequences that it has identified in the American Recovery and Reinvestment Act enacted last February.

BRADENTON, Fla. — The Securities and Exchange Commission on Monday filed a motion in Alabama federal court announcing that it had reached proposed settlements in the civil securities fraud case against Montgomery bond dealer William Blount and his firm, Blount Parrish & Co., and local lobbyist Al LaPierre.

Harrisburg’s City Council Monday evening was set to hear from outside professionals and government officials regarding Pennsylvania’s municipal financial distress program in addition to information on bankruptcy filings.

DALLAS — Boycotts in the wake of Arizona’s tough new immigration law could add pressure to the state’s slumping economy and further weaken revenue streams for sports and tourism bonds, industry experts said.

Four major municipal market groups yesterday urged the Treasury Department to immediately issue interim guidance on how to determine issue price for Build America Bonds, warning that confusion surrounding the topic is having a “chilling effect” on the still-developing market.

The Investment Company Institute is urging the Municipal Securities Rulemaking Board to expand the proposed second phase of its transparency system for short-term debt to include more types of data and documents, while the Securities Industry and Financial Markets Association is concerned that the expansion would be unduly onerous for dealers.

BRADENTON, Fla. — The nonprofit Raymond F. Kravis Center for the Performing Arts Inc. in Palm Beach County, Fla., has paid $320,000 to the Internal Revenue Service to settle a violation of the Internal Revenue Code’s 5% limit on private use in a bond-financed facility.

WASHINGTON — The Financial Industry Regulatory Authority announced yesterday that it has fined HSBC Securities Inc. $1.5 million and U.S. Bancorp Investments Inc. $275,000 to settle sales-practice violations for municipal and other auction-rate securities the firms sold to retail customers.

WASHINGTON — When President Obama last spoke at New York’s Cooper Union as a presidential candidate two years ago, he called for an overhaul of the “balkanized” regulatory system for the financial markets and blamed the credit crisis on Washington lobbyists and politicians who engineered deregulation in the late 1990s.

WASHINGTON — The Senate Agriculture Committee’s passage yesterday of a bill to regulate over-the-counter derivatives and impose a fiduciary duty on swap dealers for muni issuers drew polarized reactions yesterday. Dealer representatives warned that it would kill the muni derivatives market while a former regulator applauded the provision and called for lawmakers to go even further.

WASHINGTON — The Justice Department is seeking to intervene and temporarily halt fact-finding by a group of localities in their class action suit against Wells Fargo & Co. and 15 other banks, broker-dealers and investment brokers for allegedly conspiring to rig bids and fix prices of investment and derivatives contracts in the municipal market.

The Municipal Securities Rulemaking Board is seeking public comment on draft interpretive guidance it released yesterday that outlines steps dealers must take to ensure the prices they charge customers to buy and sell municipal securities are fair and reasonable.

BRADENTON, Fla. — The Securities and Exchange Commission has opened an investigation into an $83.3 million bond deal that Miami-Dade County sold last year on behalf of the county’s financially ailing Public Health Trust.

Alabama Gov. Bob Riley Tuesday signed a bill placing strict requirements on Jefferson County’s issuance of debt and use of swaps. He said the law would “usher in a new era of transparency and accountability for Jefferson County.”

The Jefferson County Commission Tuesday voted to submit a petition to the U.S. attorney general’s office in Alabama seeking the “criminal forfeiture” of $1.61 million to the county in connection with the federal corruption case of former county commissioner Larry Langford, lobbyist Al LaPierre and Montgomery bond dealer Bill Blount.

WASHINGTON — Senate Agriculture Committee chairman Blanche Lincoln and other Democrats contend it’s necessary to impose a fiduciary duty on dealers that act as swap ­counterparties to state and local governments because some of them have misled municipalities into entering swaps they didn’t understand.

WASHINGTON — Rep. Anna Eshoo will soon introduce legislation requiring the Treasury Department to use some of the profits it obtains from the sale of troubled assets under the TARP program to provide relief to local governments that lost money from the September 2008 Lehman Brothers collapse.

Michigan would see a relatively minor impact on its fiscal position as a result of the new federal health care law, according to an analysis by the Legislature’s Senate Fiscal Agency.