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SMUD vs. Bank of America

SMUD vs. Bank of America

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Published by: KathleenHaley on Feb 12, 2010
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05/24/2012

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Case 2:09-at-01810 Document 1 Filed 11/12/2009 Page 110 of 181

v

LAW OFFICES

COTCHETT,
PITRE &
MCCARTHY

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25 basis points, a figure that is moreover likely artificially inflated by the
existence of the artificially low courtesy bids described below.
383.Based on these factors and circumstances specific to particular
auctions, the lowest bids in the following auctions, which range from 2.8 to 145
basis points below the winning bid, appear to have been submitted not with the
intention of competing for the contract on auction, but rather as courtesy for
another bidder, most likely the ultimate winner of the particular auction.

i.

City of Riverside GIC May 28, 2004 (Row 1)

384.The greatest difference between the lowest and highest bids found in
the eighty-nine California city and county GIC auctions that were analyzed, is a
difference of
145 basis points recorded on Row 1 of Table 1, in the May 28, 2004
GIC auction conducted on behalf of the City of Riverside. In that auction,
Defendant BayernLB submitted a bid of only 3.50% while the winner of the
auction, Defendant MBIA represented by Jim Binette, submitted a bid of 4.95%.
385.The
145 basis point spread between Defendant BayernLB’s bid and
the winning bid of Defendant MBIA falls well within the range that Director Scott
identified as suspect, and for good reason. A bid that is that far below the winning
bid does not reasonably appear to have been submitted with the intention of
winning the auction. This conclusion is reinforced by the facts that: (1) the 145
basis point spread is almost six times the median spread observed in the eighty-

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