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California Trial Set in Rate-Rigging VRDO Case Against Banks

A California judge set a June 8 trial for a False Claims Act case accusing major Wall Street banks of conspiring to rig interest rates on variable‑rate demand bonds (VRDOs). The lawsuit, filed by municipal advisor Johan Rosenberg on behalf of four states through Edelweiss Fund LLC, alleges a “robo‑resetting” scheme that kept rates high, allowing banks to collect fees without remarketing the bonds. While the court dismissed some fee‑related claims, it found triable issues of a conspiracy among the banks. Similar state actions are pending in New York, New Jersey and an Illinois settlement already paid $70 million.