Missouri will receive part of $60 million dollars from Wells Fargo and its successor Wachovia for anti-competitive municipal bond derivatives schemes.
The bond derivatives are contracts that tax exempt issuers use to reinvest proceeds of bond sales until funds are needed or to hedge against interest rate risk.
Back in April of 2008 state A.G.’s began investigating allegations that large financial institutions were engaged in deceptive, unfair, and fraudulent practices in the municipal bonds derivatives market. Missouri Attorney General Chris Koster says Wachovia was engaged in bid rigging, non-competitive bidding, and fraudulent certifications of complaince file in violation of U.S. Treasury rules.
Wachovia will eventually pay states a total of $148 million dollars as a result of the settlement.