Attorney General Raoul to start allocation process in $70 million settlement with investment banks
Chicago – Attorney General Kwame Raoul announced today that his office will begin distributing funds from a $70 million settlement approved in October 2023. The settlement involves Bank of America, Barclays Capital Inc., BMO Financial Corp., Citigroup Inc., Fifth Third Bancorp, JPMorgan Chase & Co., Morgan Stanley, William Blair & Co., and Edelweiss Fund LLC (Edelweiss).
The settlement is one of the largest reached under Illinois' False Claims Act and resolves allegations that the defendants rigged interest rates on bonds known as variable rate demand obligations. The False Claims Act allows the state to hold parties accountable for defrauding the state.
"This historic settlement is the result of extensive negotiations," Raoul stated. "I am pleased that the state and local governments across Illinois will soon see these funds restored to the benefit of taxpayers."
Following court approval of Raoul’s motion to authorize fund distribution, $33.6 million will be allocated to bond issuers in Illinois, including several municipal governments. More information on fund distribution can be found in the court order.
Edelweiss initiated the original complaint as a whistleblower under Illinois’ False Claims Act and will receive the remainder of the settlement amount as compensation and for legal costs.
Division Chief Chris Wells and Deputy Division Chief David Buysse of Raoul’s Public Interest Division, Bureau Chief Harpreet Khera, and Complex Litigation Counsel Isaac Freilich Jones handled litigation for Attorney General Raoul’s office.