Law and regulation

The Municipal Securities Rulemaking Board announced it will begin a multi-month review of muni bond indexes with the aim of increasing transparency and educating market participants about how the they are developed and used.

The Municipal Securities Rulemaking Board has named Jay Goldstone, chief financial officer and chief operating officer of San Diego, as its new board chairman, effective Oct. 1 for a one-year term.

Members of the Senate Banking Committee grilled Treasury Secretary Timothy Geithner Thursday about his knowledge of manipulation of the London Interbank Offered Rate, or Libor, and raised concerns about its potential impact on state and local governments that entered into Libor-based swaps.

Former employees of financial firms who have already pleaded guilty to rigging muni bond contracts will be allowed to testify in the upcoming bid-rigging trial against former UBS Financial Services Inc. bankers Peter Ghavami, Gary Heinz and Michael Welty, a judge ruled Tuesday.

Municipal Securities Rulemaking Board officials said Tuesday the board is looking into the Libor scandal to see how it may impact the municipal bond industry.

The federal judge assigned to the upcoming bid-rigging trial against three former UBS Financial Services Inc. bankers has struck down requests to drop all six criminal counts of conspiracy, wire fraud, and witness tampering.

The SEC will be asked to allow federal civil charges to be filed against Miami for failing to disclose serious budget problems in its bond offerings.

Phillip D. Murphy, a former manager of municipal derivatives products at Banc of America Securities LLC, now Bank of America Merrill Lynch, was indicted by a federal grand jury on three counts of conspiracy and wire fraud in connection with a fraudulent scheme to rig bids for municipal-bond related investment agreements.

Rep. Robert Dold, R-Ill., is open to dropping his bid to legislatively remove the Dodd-Frank-mandated federal fiduciary duty for municipal advisors if there is a narrowing of who would be considered an MA, an aide said Friday.

The bill introduced by Rep. Robert Dold, R-Ill., to limit the muni market participants that would be federally regulated as municipal advisors could reduce protection of state and local governments, the chairman of the MSRB warned a congressional panel.

The Securities and Exchange Commission is expected to propose Congress give it authority to set primary and secondary market disclosure standards for municipal issuers.

Federal regulators do not support wholesale removal of the Tower Amendment or exemptions from federal securities laws for municipal securities, the General Accountability Office said in a report issued Thursday.

The Securities and Exchange Commission is preparing to issue a report, as soon as Thursday, proposing legislative and regulatory changes that would improve disclosure and price transparency in the $3.7 trillion municipal bond market.

Both the Municipal Securities Rulemaking Board and the Securities Industry and Financial Markets Association on Wednesday released guidance to help underwriters comply with the MSRB's interpretative release on its Rule G-17, which details their disclosure and other fair-dealing obligations to state and local governments issuing municipal bonds.

The House Financial Services Committee's capital markets panel on Friday will hear testimony from nine witnesses representing dealers, state and local governments, and nonprofit organizations at a hearing on the Dodd-Frank Act's impact on the municipal market.

The Financial Industry Regulatory Authority has ordered five firms to pay $117,425 in fines and restitution to customers for violation of municipal securities trade, pricing and supervisory rules.

A regulator will allow bond insurer MBIA Inc. to make a payment on surplus notes issued in 2008, the company said.

A group of Senate Democrats is urging the U.S. Department of Justice and federal banking and securities regulators to investigate allegations that domestic and foreign banks manipulated the London Interbank Offered Rate, or Libor, which is used as a benchmark in municipal bond-related swaps and other financial products.

Municipal market participants are praising rules finalized by the Commodity Futures Trading Commission that except most state and local governments from having to clear interest rate swaps through a derivatives clearing organization.

Lawyers for former UBS Financial Services Inc. bankers Peter Ghavami, Gary Heinz and Michael Welty requested permission from the court to present evidence on municipal bond transactions other than 38 specific deals highlighted by prosecutors.