Wall Street Banks Seek Dismissal of Muni Whistle-Blower Suit

Eight banks that help sell municipal bonds for Illinois asked a judge to dismiss a $1 billion lawsuit accusing them of fraud and collusion.

The remarketing agents for variable-rate demand obligations say that the suit filed on April 5 by Edelweiss Fund LLC under the Illinois False Claims Act doesn’t identify specific statements made by any of the defendants, false or otherwise. They also claim that it’s based upon conjecture rather than inside knowledge; and that the majority of deals cited were done through conduits “made on behalf of non-State entities who bear all of the financial risks of the ...