Attorney General J.B. Van Hollen Announces $34.25 Million Multistate Settlement With GE Funding Capital Market Services

MADISON — Attorney General J.B. Van Hollen announced today a $34.25 million multistate settlement with GE Funding Capital Market Services to settle allegations that the company engaged in anticompetitive conduct in the municipal bond derivatives industry. The settlement is one component of a $70 million coordinated state and federal law enforcement and regulatory action involving the U.S. Department of Justice, the Securities and Exchange Commission and the Internal Revenue Service.

As a part of the settlement, GE Funding Capital Market Services has agreed to pay $30 million that will be used to reimburse certain government and nonprofit organizations across the United States that were injured as a result of the allegedly anticompetitive conduct. GE Funding Capital Market Services also agreed to pay a $1.25 million civil penalty and $3 million to reimburse the states for fees and costs incurred during the investigation.

“I am pleased that we are continuing to make progress in our investigation,” Attorney General Van Hollen said. “It is important that those who allegedly manipulated the municipal bond derivatives market are held accountable.”

The ongoing multistate investigation has revealed allegedly collusive and deceptive conduct by individuals at several financial institutions. The conduct included bid rigging, agreements to refrain from bidding, and fraud. Ultimately the conduct resulted in lower yields, lower rates of return, or less favorable terms for government and not-for-profit organizations.

The number of Wisconsin government and nonprofit entities affected by this settlement and the amount they will receive will be determined in the coming months.

Assistant Attorney General Gwendolyn J. Cooley represents the State of Wisconsin in this matter.