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County Given $1.9 Million In Bank Of America Settlement

HARRISBURG PA – Montgomery County (PA) will receive $1.99 million during the first phase of payments from a national bid-rigging settlement with Bank of America, Pennsylvania Attorney General Tom Corbett said Wednesday (Jan. 5, 2010). The county was among a list of 30 named recipients who are sharing $8.4 million under the settlement agreement.

Nearby Chester County as well is receiving more than $320,000; and 19 different school districts also will get money, but none are within The Post’s western Montgomery County coverage area.

Corbett said the funds would be electronically transferred this week to government entities allegedly victimized by a national scheme that artificially increased their investment costs and reduced their rate of return. The payments are from the federal portion of the Bank of America settlement, which involved the Securities and Exchange Commission (SEC) and the Office of the Comptroller of the Currency (OCC).

The settlements are the result of a broad investigation into the marketing and sale of municipal derivative investments. They often are used by government agencies and non-profit organizations to reinvest the proceeds of tax-exempt bond offerings.

According to the settlement agreement, between 1998 and 2003 Bank of America and other financial institutions and brokers allegedly rigged bids, received and provided “last looks” on bids, and submitted non-competitive “courtesy” bids on investments. The schemes were said to be intended to make the financial institutions or brokers richer by causing the buying entities to accept contracts that cost more or earned less than they should have received in a competitive market.

An additional $4 million in restitution from the state portion of the Bank of America settlement will be distributed in the near future to more than 100 Pennsylvania government agencies and non-profit organizations, Corbett added.

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