* Banks accused of rigging municipal derivatives prices
* More than $226 million settlements reached overall
* JPMorgan, others settled with U.S. Department of Justice
By Jonathan Stempel
NEW YORK, Feb 24 (Reuters) - UBS AG UBSG.VX , Natixis SA
CNAT.PA and four other banks and brokerages agreed to pay just
over $100 million to settle investor claims that they conspired
to rig prices for municipal securities.
If approved by a federal judge, the settlements disclosed on
Wednesday would end seven years of private class action
litigation, and result in more than $226 million of payouts from
11 defendants.
The plaintiffs, including the City of Baltimore and the
Central Bucks School District in Pennsylvania, accused the
defendants of conspiring to fix prices for municipal
derivatives, causing them to receive lower interest rates than
they would have gotten in a competitive marketplace.
Municipalities that sell bonds typically invest proceeds
they do not need to spend immediately elsewhere, and hire banks
and brokers to seek out competitive bids.
The defendants were accused of abusing this process through
such means as getting advance peeks at their rivals' bids, or
purposely submitting non-winning bids.
Wednesday's settlements include $32 million with UBS, $28.45
million with France's Natixis, $25.41 million with Societe
Generale SOGN.PA , $9.75 million with Piper Jaffray Cos
PJC.N , $3.5 million with Royal Bank of Scotland Group Plc's
RBS.L National Westminster Bank, and $1.4 million with George
K. Baum & Co, court papers show.
The defendants denied wrongdoing. Their settlements require
approval by U.S. District Judge Victor Marrero in Manhattan.
Other defendants that have settled include JPMorgan Chase (N:JPM) &
Co JPM.N , Wells Fargo (N:WFC) & Co WFC.N , Bank of America Corp (N:BAC)
BAC.N , General Electric (N:GE) Co GE.N and Morgan Stanley (N:MS) MS.N .
JPMorgan's $44.6 million settlement was the largest.
A lawyer for the plaintiffs did not immediately respond to
requests for comment.
The U.S. Department of Justice and state regulators have
also prosecuted corruption in the municipal bond markets.
At least five banks agreed to pay more than $740 million in
penalties, restitution and disgorgement, including $228 million
for JPMorgan, and at least 17 people have been convicted or
pleaded guilty, the Justice Department has said.
The case is In re: Municipal Derivatives Antitrust
Litigation, U.S. District Court, Southern District of New York,
No. 08-02516.