A federal judge in New York ruled this week that San Mateo County and other California agencies can proceed with a lawsuit accusing some of the country's largest financial institutions of colluding to defraud taxpayers out of millions of dollars.
The county alleges that Goldman Sachs, JPMorgan Chase, Citigroup, Morgan Stanley and other investment banks colluded to pay below-market interest rates when governments bought Guaranteed Investment Contracts and passed kickbacks to each other in lieu of competing for contract bids.
"They violated the public trust, and they took advantage of taxpayers, and because of that, some of our municipalities like San Mateo have to cut services, and teachers and students will suffer," said Nanci Nishimura, an attorney with Burlingame-based firm Cotchett Pitre & McCarthy, who is representing the public entities. "That's how far down it affects us all."
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