York City to be paid from bid-rigging restitution
York City is one of more than 100 Pennsylvania entities to share $4 million being paid in restitution by Bank of America as part of a settlement in a bid-rigging scheme, according to Attorney General Tom Corbett.
The national investigation has focused on the marketing and sale of municipal derivative investments used to reinvest the proceeds of tax-exempt bond offerings.
Investors were "victimized by complex schemes to rig bids and avoid competition, designed to generate additional profits for Bank of America and the other co-conspirators," Corbett said.
Bank of America and other banks conspired to enter investors into contracts that cost more or earned less than they should have received in a competitive marketplace, said Nils Frederiksen, deputy press secretary for the attorney general.
"In a nut shell, what happened was these municipalities invested money and thought they were getting a good return, but because it was being rigged, they were getting less interest than they should have and paying higher fees."
Bank of America didn't get all bids, as sometimes their role in the scheme was to bid higher so a co-conspirator could get the bid, and "the winners and losers were decided ahead of time," Frederiksen said.
The restitution amounts are still being calculated, he said.
No comments:
Post a Comment