Municipal Derivatives

Plaintiff in this case alleges that several of Wall Street's biggest firms engaged in bid-rigging. The defendants include AIG Financial Products, Bank of America, Bear Stearns, JPMorgan Chase, Lehman Brothers Inc., Merrill Lynch & Co., Morgan Stanley and Wachovia Bank.  The Complaint alleges financial companies and brokers agreed among themselves to give cities artificially low bids for guaranteed investment contracts, swaps, and other financial products, which cities, counties, school districts and other public entities use to earn interest on bond proceeds. By conspiring to avoid competitive bidding, financial companies were able to give cities anticompetitive low interest rates, depriving taxpayers of the market rate of return.  The case is pending in the United States District Court, Southern District of New York.