Law and legal issues

The Municipal Securities Rulemaking Board plans later this year and next to host two compliance seminars with the Securities Industry and Financial Markets Association, as well as a series of Web seminars on the board's market information programs.

CHICAGO - Iowa Gov. Chet Culver has suspended the state's film tax-credit program and asked the state auditor and attorney general to assist in a review after an audit found lax oversight had allowed producers to claim credits for unqualified expenses, raising questions over the value of the program as the state seeks to remain in the black.

SAN FRANCISCO - A federal judge is pushing the Securities and Exchange Commission to settle its case against five former San Diego officials accused of securities fraud for failing to disclose growing unfunded pension liabilities to municipal bond investors.

CHICAGO — The Ohio Supreme Court ruled yesterday that Gov. Ted Strickland’s budget-balancing plan to install video lottery terminals at the state’s race tracks must go to voters.

SAN FRANCISCO — California Attorney General Jerry Brown yesterday said he has issued subpoenas to the three major rating agencies as part of an investigation into whether they violated state law by giving high ratings to subprime mortgage-backed securities and other complicated debt instruments that proved to be worthless as the housing market bubble burst.

A federal judge in Birmingham has set Nov. 12 as the new date that former Jefferson County commissioner Mary Buckelew will be sentenced for obstruction of justice for lying to a federal grand jury about receiving gifts from Montgomery-based bond dealer William Blount when the county’s sewer debt was refinanced in 2002 and 2003.

WASHINGTON - A group of municipal analysts is urging the Securities and Exchange Commission to require muni issuers to file with EMMA certain material event notices related to swaps, bank bonds, and liquidity facilities. But issuers and borrowers are warning that the proposed 10-day deadline for filing material event notices would be difficult or impossible to meet and are pushing for 30 days instead.

WASHINGTON - Nine municipal issuer groups are urging the Securities and Exchange Commission to only designate rating agencies as nationally recognized statistical rating organizations if they have uniform scales for rating muni and corporate securities.

BRADENTON, Fla. - Jefferson County, Ala., commissioners yesterday extended yet another forbearance agreement with liquidity banks holding approximately $120 million of variable-rate demand general obligation warrants.

WASHINGTON - Allstate Investments LLC is urging the Municipal Securities Rulemaking Board to require broker-dealers to disclose how they calculate the interest rates for auction-rate securities when the auctions fail, saying this is the critical ARS information currently needed by investors.

SAN FRANCISCO — In an action that stands to drag out Vallejo, Calif.’s already 16-month-old bankruptcy proceedings, the International Brotherhood of Electrical Workers plans to appeal a court ruling allowing the city to reject its collective bargaining agreements.

BRADENTON, Fla. — Jefferson County, Ala., is negotiating with a local bank to obtain a bridge loan in order to put an unknown number of county workers back on the payroll.

CHICAGO - Michigan withheld $11.3 million in revenue-sharing aid from Detroit this week as the cash-strapped city is eight months overdue in submitting its 2008 fiscal audit.

CHICAGO - The Fox River Valley city of Menasha, Wis., and its advisers are continuing "good-faith" negotiations with investors who hold $24 million of city appropriation-backed steam plant revenue bond anticipation notes following the city's default on the notes that were due Tuesday.

SAN FRANCISCO - A federal bankruptcy court on Tuesday allowed Vallejo, Calif., to reject the last of four labor contracts that bankrupted the San Francisco Bay Area city.

BRADENTON, Fla. - Community development districts in Florida have sold billions in so-called dirt bonds in recent years and many are now distressed, while some have defaulted.

Three securities firms have agreed to buy back roughly $128 million of auction-rate securities and pay fines totaling $600,000 in final settlements with the Financial Industry Regulatory Authority, though one firm official said the settlement process was "completely unfair."

WASHINGTON - The Securities and Exchange Commission and Commodity Futures Trading Commission have different regulatory approaches, which may pose challenges to harmonizing their rules and dividing up oversight of over-the-counter derivatives, market participants and others said yesterday at an historic joint-agency hearing.

BRADENTON, Fla. - Florida Gov. Charlie Crist has signed a second, revised Indian gaming compact that could bring some much-needed funding into the state's coffers, but its fate may be in jeopardy.

A broker-dealer group is warning the Municipal Securities Rulemaking Board that its proposal for dealers to disclose more information about short-term securities would be onerous and is urging it to do a cost-benefit analysis before proceeding any further.