Federal authorities have begun a investigation into Louisiana's recent general obligation bond issue to find out why Lazard Freres & Co. and First Boston Corp. gave up half their profits to a little-known local underwriter, according to federal and state officials.

The U.S. attorney in Baton Rouge, Raymond LaMonica, confirmed in an interview that his office has begun an investigation into the profit-sharing arrangement, but said he could not provide further details.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.