Yield burning was a method by which major Wall Street U.S. municipal bond dealers cheated the United States government out of millions of dollars of revenue.
In 2004, the United States Court of Appeals for the Second Circuit described the following: By 2005, federal regulators became concerned that the yield burning scandal was having a redux.
[5] Some of the concern stemmed from a ruling in Lissack's qui tam case, which held yield burning to be a tax issue and thus exempt from the provisions of the federal False Claims Act.
[8] Several major firms ultimately reached a settlement with the Securities and Exchange Commission and Internal Revenue Service regarding a replay of the bid rigging practices that had been originally exposed by Lissack's qui tam suit (the basis of the 2nd District Court language above).
[9] In July 2011, JPMorgan Chase became the third major institution (after Bank of America and UBS) to settle with regulators, bringing the total recovered in the present round of activity to nearly $500 million.