YOUR BUSINESS AUTHORITY

Springfield, MO

Log in Subscribe

MO to receive $320K as part of GE Funding settlement

Posted online
Missouri will receive more than $320,000 as part of a $34.25 million multistate settlement with Stamford, Conn.-based GE Funding Capital Market Services Inc., which allegedly engaged in illegal conduct in the municipal bond derivatives industry.

GE Funding has agreed to pay $30 million in restitution, a $1.25 million civil penalty and $3 million in fees and costs, according to a Dec. 23 news release from Missouri Attorney General Chris Koster's office.

Restitution payments will be given to affected state agencies, municipalities, school districts and nonprofits throughout the country that entered into guaranteed investment contracts with GE Funding and two of its affiliates, Trinity Funding Co. LLC and Trinity Plus Funding Co. LLC, between 1999 and 2005.

Guaranteed investment contracts allow organizations to earn interest on the proceeds of a municipal bond before the money is spent. The GE Funding case alleges that company traders worked in concert with certain brokers to determine in advance whether GE Funding would win a guaranteed investment contract by allowing the company a last look and arranging for other institutions to purposely submit courtesy bids. According to the release, this allowed GE Funding to win contracts without offering its best and highest interest rates.

The multistate settlement is part of a coordinated $70 million which also had the company reaching agreements with the U.S. Securities and Exchange Commission, the U.S. Department of Justice’s Antitrust Division and the Internal Revenue Service.

GE Funding is the fifth financial institution to settle with the multistate task force in an ongoing investigation concerning municipal bond derivatives. Others were reached with Bank of America, UBS AG, JP Morgan and Wachovia Bank. To date, Missouri entities are eligible to retrieve more than $5 million from the settlements, the release said.[[In-content Ad]]

Comments

No comments on this story |
Please log in to add your comment
Editors' Pick
New leader arrives on Drury campus

Jeff Frederick seeks to boost the university’s community connections.

Most Read
SBJ.net Poll
Do you play pickleball?

*

View results

Update cookies preferences