Dec 17, 2010 11:00 AM GMT+0100
Ex-JPMorgan Banker Says Minnesota Broker Helped Him Rig Bids
By William SELWAY and Martin Z. BRAUN:
"A former JPMorgan CHASE & Co. banker who CONSPIRED to fix prices on municipal-bond investment contracts said he was aided by a Minnesota company that ran auctions for the deals on behalf of public agencies.
James HERTZ, 53, who admitted FRAUD and CONSPIRACY charges, said Sound Capital Management Inc., an Eden Prairie-based financial adviser to local governments, told him what a competitor bid so he could adjust his offer and win the deal, according to a transcript of his plea hearing Nov. 30. The charges say Hertz received tips about other bids from “Broker E,” an unidentified Minnesota firm.
Sound Capital was one of at least three financial advisers that federal agents raided in 2006. The action was part of a national investigation of a conspiracy among banks to carve up the market for investments made with money that public agencies raise in the $2.8 trillion municipal-bond market.
The Justice Department hasn’t accused Sound Capital of wrongdoing. Johan Rosenberg, the company’s chief executive, said he has no indication that anyone at the firm will face charges and disputed Hertz’s characterization.
“Every situation can be interpreted two ways,” he said. “Sound Capital continues to stand by its practices.”
Rosenberg is also chief executive of DerivActiv LLC, a firm that values derivatives for municipalities and non-profits.
Former employees of UBS AG, CDR Financial Products Inc. and two other brokers for local governments have pleaded guilty to running sham auctions for investments that delivered banks money at taxpayers’ expense"...
SOURCE / LINK / QUELLE dieses Ausschnitts:
www.bloomberg.com/news/2010-12-17/...-helped-him-rig-bids.html
Den Vorhang AUF, der Krimi geht weiter...