Illinois Feared Losing to Wall Street, Forcing VRDO Settlement

Illinois is defending its decision to accept a $68 million settlement from a cohort of Wall Street banks to conclude an almost decade-long lawsuit over municipal bond price-fixing by questioning the claims of the firm that filed the case on its behalf.

The lawsuit, originally filed under seal in 2014 by an entity called the Edelweiss Fund LLC, sought around $349 million in pre-trebled damages and another $350 million in statutory damages. Edelweiss brought the False Claims Act lawsuit as a “relator,” or someone filing a lawsuit on behalf of an injured party — in this case, the state of ...