Public financing, including municipal bond issues and refinancings, involve taxpayer dollars.
When securities firms, investment banks, and others engage in fraud in connection with these transactions, liability either under the federal False Claims Act or its state analogues may be triggered.
The most famous cases in this area arose from a fraudulent practice known as “yield burning,” which was used by some Wall Street securities firms to overcharge municipalities for U.S. Treasury securities in connection with municipal bond refinancings. The scheme was originally revealed in the 1990’s by a whistleblower who was an investment banker in the municipal bond department at Smith Barney. He filed a whistleblower suit that led seventeen Wall Street and regional brokerage firms to agree to pay approximately $140 million to settle claims they had violated the False Claims Act by engaging in yield burning.
If you have knowledge and solid evidence of fraud or false claims involving public financing, please contact our Chicago whistleblower attorneys.
Consultations are free and confidential.