Thursday, April 24, 2008

Oakland Sues Wall Street For Doing Bad Things

By Chris Thompson
Thu, Apr 24, 2008 at 7:27 AM

Ever since the city of Oakland went on its idiotic redevelopment binge, city officials have privately suspected that the firms handling its bond issuances have been burning them in countless different ways. Now, City Attorney John Russo is firing back, suing Bank of America, JP Morgan Chase, and a host of other Wall Street firms. Oakland has been borrowing money to spend on a variety of projects, but holding it in reserve until the projects come online. In the meantime, that reserve account, which is handled by Wall Street firms, is contractually supposed to be invested in businesses that typically make higher than average returns. But according to the Trib, Russo's office claims that these companies colluded to keep the investments below market, costing the city as much as $500,000. The lawsuit follows a federal investigation into this practice nationwide.


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