POINT PLEASANT – The first of 22 banks and financial institutions named in a lawsuit brought in 2009 by former state Attorney General Darrell McGraw has reached a settlement.
On April 24, the Attorney General’s Office submitted papers that ask Mason County Circuit Court Judge David Nibert to approve the terms of a $175,000 settlement with Royal Bank of Canada that provides for more than $58,000 for private attorneys hired to represent the State.
McGraw’s lawsuit was originally filed by Bank of America in Mason Circuit Court, but was transferred to a multidistrict litigation proceeding in New York federal court. There, McGraw added what he called co-conspirators in Bank of America’s alleged bid-rigging scheme.
“We are pleased the office and RBC could reach a settlement in this case,” said current Attorney General Patrick Morrisey, who took office earlier this year.
“This settlement allows the State and RBC to avoid the distraction and expense of ongoing litigation while ensuring that the State and consumers are protected.”
McGraw’s amended complaint, which also listed three brokers as defendants in addition to the 22 financial institutions, said Bank of America and the defendants manipulated the municipal bond market.
The alleged conspiracy affected the sale of financial contracts by state agencies and local municipalities that were paid for with the proceeds of bond sales, the complaint says.
McGraw says the State did not receive substantial interest payments because bid-rigging allowed companies to sell their financial products to state agencies at lower rates of interest than normal.
RBC did not admit to any wrongdoing in the settlement. The Attorney General’s Office called RBC a “very small player” in the alleged scheme.
It also said the terms of the settlement were agreed to late last year while McGraw was still in office.
The Mason County filing asks Nibert to approve $58,327.50 for attorneys Joshua Barrett, Sean McGinley and Robert V. Berthold.
Barrett and McGinley are of the Charleston firm DiTrapano Barrett & DiPiero, while Berthold formerly worked at Berthold Tiano & O’Dell and now has his own firm – Berthold Law Firm.
McGraw had also hired Cook Hall & Lampros of Atlanta, but the firm’s partners are currently suing each other.
One of those partners – Edward Shuff Cook – is the nephew by marriage of former state Supreme Court Justice Warren McGraw, Darrell’s brother.
Cook’s complaint says Christopher Hall and Andrew Lampros have frozen him out of the firm and are settling his cases. Hall and Lampros filed a counterclaim on Nov. 6 in a Georgia state court.
They claim Cook, who had exclusive control of the firm’s finances over the past nine years, filed his complaint as a preemptive move in the face of evidence of his misconduct.
In addition to Bank of America and Royal Bank, financial institutions listed as defendants are: UBS AG and subsidiaries UBS Financial Services and UBS Securities; JP Morgan Chase and subsidiary JP Morgan Securities; MBIA; Morgan Stanley; Rabobank Group; Bayerische Landesbank Girozentrale; Transamerica Occidental Life Insurance; AIG Financial Products; AIG Matched Funding; Financial Security Assurance; Assured Guaranty US Holdings; Dexia; GE Funding Capital Market Services; Natixis Funding; and Financial Guarantee Insurance.
From the West Virginia Record: Reach John O’Brien at email@example.com.