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Federal authorities are pursuing legal action against bankers accused of systematically defrauding states, local governments and non-profits. The ongoing probe is focusing on bankers who have colluded about the offers they’ve made as they bid on contracts to invest municipal bond proceeds.

1. What is bid-rigging? Summarize the way in which the suspect bankers perpetrated their municipal bond crime.

2. Over the course of the federal investigation, which firms have been found to be participating in the bid-rigging? How much have the victimized government agencies been able to collect in penalties, restitution and other fees from the institutions involved?

3. While the investigation remains ongoing, how old are some of the bid-rigging instances?

4. Is this a victimless crime? If not, who are the those stakeholders that lose money in this scheme?

O’Toole, J. (2012). Bankers nabbed in bid-rigging scandal,, Sep. 18 (Retrievable online at