October 30, 2008
From Civil Litigation to Frog Marches
It’s a little hard to believe that any lawyer would let a governmental entity sign up for something called a “swaption,” but it happened down in Alabama and the SEC and Justice Department seem none too happy about it:
The agonies of Jefferson County, Alabama, which got itself into a too-clever-by-half funding arrangement that put the county on the verge of bankruptcy, have faded from the public eye. However, the type of transaction that caused so much woe, a swaption to supposedly lower financing costs, has been the subject of SEC and Justice Department investigations for some time. The focus has moved to JP Morgan based on its role in the ill-fated Jefferson County deal and other municipal transactions.
The fallout continues.