GE to settle municipal bond rigging lawsuit for $18 million
NEW YORK (Reuters) - General Electric Co has agreed to pay as much as $18.25 million to settle a class action lawsuit accusing it of rigging bids for municipal securities, court papers filed on Friday show.
The accord requires court approval, and flows from litigation that began in 2008 over claims that banks and finance companies conspired to artificially fix prices for so-called municipal derivatives.
The GE settlement involved activity by three of the company's units: GE Funding Capital Market Services, Trinity Funding Co and Trinity Plus Funding Co.
A spokesman for General Electric did not immediately respond to a request for comment.
The settlement was revealed two days after plaintiffs sought court approval of a separate $20 million settlement with Bank of America Corp over its own alleged big-rigging conduct.
The deal also came almost two weeks after a federal appeals court reversed the convictions of three former GE banking executives for conspiring to rig bids for contracts to invest municipal bond proceeds.
The 2nd U.S. Circuit Court of Appeals has yet to release its reasoning for overturning the 2012 convictions of the three GE Capital bankers: Dominick Carollo, Steven Goldberg and Peter Grimm.
GE's settlement follows an earlier $30 million settlement by the Fairfield, Connecticut-based company to resolve claims by state attorneys general.
In 2011, GE also agreed to pay $70 million to resolve a investigation by the U.S. Department of Justice into its role in bid-rigging of municipal bonds.
In the lawsuit, investors contended bid-rigging by GE and other firms violated antitrust law and forced them to receive lower interest rates than they otherwise would have.
The lead plaintiffs include the City of Baltimore, and the Central Bucks School District and Bucks County Water & Sewer Authority in Pennsylvania.
The GE and Bank of America settlements follow earlier deals for $44.6 million by JPMorgan Chase & Co, $37 million by Wells Fargo & Co and $6.5 million by Morgan Stanley, court papers show.
As with GE, Bank of America, JPMorgan, Wells Fargo and UBS AG have settled related claims brought by various state attorneys general.
The case is In re: Municipal Derivatives Antitrust Litigation, U.S. District Court, Southern District of New York, No. 08-02516.