8 days ago
SACRAMENTO, CA - The Sacramento Municipal Utility District is accusing some of the biggest names in the financial world of collusion, bid-rigging and other fraudulent activity in a massive lawsuit filed Thursday in Sacramento federal court.
The 181-page complaint names nearly 50 financial institutions and brokers SMUD believes are responsible for predatory conduct in their handling of investment vehicles known as municipal derivatives. SMUD claims illegal actions by the defendants cost SMUD ratepayers money while inflating the profits of the financial institutions.
The lawsuit reads like a textbook with chapters titled "Bid-rigging," "Kickbacks," and "It's nice to have friends."
Among the many defendants named in the complaint are Bank of America, JP Morgan Chase, Wells Fargo, Citibank, AIG, Morgan Stanley and Merrill Lynch.
The lawsuit claims the illegal conspiracy was based on a web of interlocking relationships between the financial institutions and brokers. SMUD claims violations of federal and state antitrust laws because the utility was denied the benefits of competition.
The SMUD complaint follows a number of federal criminal probes into alleged abuses involving municipal derivatives. SMUD said the allegations contained in the lawsuit are based on its own investigation. The suit does not seek specific money damages.
by George Warren, GWarren@news10.net
News10/KXTV
