By Jocelyn Allison

Law360, New York (January 12, 2009, 12:00 AM ET) -- The group that oversees broker-dealers in the municipal bond market is calling on the U.S. government to increase regulation as investigations continue into allegations of bid-rigging across the industry.

The Municipal Securities Rulemaking Board on Friday issued a statement urging President-elect Barack Obama and the new Congress to consider bringing financial advisers, brokers of guaranteed investment contracts and other unregulated participants in the market under federal regulation.

Allegations of wrongdoing in the municipal marketplace have created “widespread confusion” over how the market is regulated, the group...