The Securities and Exchange Commission is accusing Kings Canyon Joint Unified School District of not giving municipal bond investors the financial data and notices to which they were entitled. The California school district settled the SEC’s findings without denying or admitting to the charges. Kings Canyon has consented to an…
Investment firms OppenheimerFunds Inc. and Franklin Templeton (BEN) have filed a lawsuit claiming that Puerto Rico’s new law, which lets certain government agencies restructure their debt, violates the constitution. Lawmakers in Puerto Rico approved the bill last month. Aside from its power agencies, the entities that would be allowed to…
The SEC has gotten an emergency court order against the city of Harvey. The order puts an end to a bond offering that the Chicago, Illinois suburb was promoting. Also named in the order is Joseph T. Letke, the city’s controller. The regulator contends that Harvey and Letke allegedly took…
Authorities in the United States are reportedly investigating UBS AG (UBSN) for its actions in Puerto Rico. The criminal fraud investigation comes in the wake of allegations that an ex-UBS broker in Puerto Rico told clients to improperly borrow money to purchase local mutual funds that later sank. The investigation…
Moody’s Investors Service (MCO) and other credit rating agencies are saying that there is a good chance that Doral Financial Corp. (DRL), which is based in Puerto Rico, will default on over $150M muni notes and bonds. Moody’s has downgraded both a note and a bond that was issued by…
According to statistics put together by the Financial Industry Regulatory Authority, the number of securities arbitration cases brought by the self-regulatory agency is on target to exceed last year’s total. A likely contributor to the increase can be attributed to the numerous Puerto Rico municipal bond cases already filed by…
The US Securities and Exchange Commission is finally beginning to scrutinize municipal bond issuers. Recent efforts include the opening of investigations into whether certain municipalities misled investors about their financial well-being before they made their bonds available to them. The SEC’s municipal-bond enforcement unit is searching for occurrences involving “tension”…
According to The Wall Street Journal, a number of large hedge funds and other nontraditional buyers got involved in Puerto Rico debt last month during the US Territory’s $3.5B bond sale, buying up to 70% of the deal. Brigade Capital Management, Och-Ziff Capital Management (OZM) LLC, Perry Capital LLC, Paulson…
Bank of America (BAC) will pay $9.3 billion to settle securities claims that it sold faulty mortgage bonds to Freddie Mac (FMCC) and Fannie Mae (FNMA). The deal, reached with the Federal Housing Finance Agency, includes $3.2 billion in securities that the bank will buy from the housing finance entities…
According to Bloomberg, Puerto Rico bonds that were issued this month are now at record low prices after the Financial Industry Regulatory Authority announced that it is looking at transactions involving the new securities. The US territory sold $3.5 billion of general obligation bonds, which is the largest junk bond…