Financial Security Assurance Holdings Ltd.’s (“FSA”) bond insurance unit reported in an 8-K filed February 4, 2008, that the U.S. Securities and Exchange Commission (the “SEC”) may bring a complaint against the company as part of an investigation into whether bids were rigged on investment contracts with local governments. Click here to review FSA’s 8-K.

In the 8-K, FSA reported having received a Wells Notice from the staff of the Philadelphia Regional Office of the SEC. The Wells Notice relates to a previously disclosed investigation concerning the bidding of municipal guaranteed investment contracts (“GICs”). The SEC and U.S. antitrust regulators are investigating the process by which auction bids to manage investments made by state and local governments with bond proceeds are conducted. FSA states that the Wells Notice indicates that the SEC staff is considering recommending that the SEC authorize the staff to bring a civil injunctive action and/or institute administrative proceedings against the Company, alleging violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and Section 17(a) of the Securities Act of 1933.

In an 8-K filed on November 15, 2006, FSA reported that it, along with a number of other financial institutions, received a subpoena from the Antitrust Division of the U.S. Department of Justice issued in connection with the investigation of bid rigging of awards of GICs. Click here to read FSA’s November 15, 2006 8-K.

In response to the Wells Notice, FSA noted that it would have an opportunity to respond and discuss the matter with the SEC staff before any recommendation is made to the SEC