The Sacramento Municipal Utility District, a California public utility, has sued more than a dozen banks including Bank of America, UBS and JPMorgan Chase & Co over claims that they rigged sales of municipal derivatives and shared illegal profits through kickbacks, reported Bloomberg.
Sacramento alleged that more than a dozen other banks conspired to pre-select winners of municipal derivative auctions, coordinated their pricing and accepted kickbacks disguised as fees from co-conspirators.
According to the lawsuit, “The banks engaged in allocating customers and markets for municipal derivatives, rigging the bidding process by which municipal bond issuers acquire municipal derivatives and conspiring to manipulate the terms that issuers received,” reported the news agency.
