LA sues Wall Street firms alleging municipal bond fix

The city of Los Angeles has filed two lawsuits against more than 30 Wall Street finance firms, including some top investment banks, alleging municipal bond collusion that cost taxpayers millions of dollars. The complaints were filed in Los Angeles Superior Court, according to a press release dated July 23 and issued by the Office of the City Attorney. One suit claims that financial institutions and brokers colluded among other things to rig the bidding process the city uses to get the most competitive rates for its investments. The second claims that when LA issued municipal bonds to finance public works, it was compelled to purchase insurance from bond insurers that agreed among themselves to maintain a dual credit-rating system that charged the city and other public entities high premiums. Some financial institutions named... [read full story]