Banks Face Third Lawsuit on Variable-Rate Munis as Case Unsealed

A lawsuit against banks that market variable-rate bonds sold by U.S. states and local governments was unsealed in California, making it the third state where Wall Street firms are fighting off a legal challenge for their work in a large corner of the municipal securities market.

The case, initially brought 2014 by the Edelweiss Fund, a Delaware-registered company, was unsealed in state court in San Francisco in December. Echoing the two other lawsuits filed by the fund in Illinois and Massachusetts, it alleges that more than a dozen banks, including Bank of America Corp. and Citigroup Inc., fixed the yields ...