Nearly 30 bankers from more than a dozen financial companies have been named by the federal government as suspected co-conspirators in a broad investigation into pricing of certain municipal derivatives, according to court documents.
The list, made public this week in Manhattan federal court in a criminal case, said the 29 bankers included employees of Bank of America Corp
None of the individuals or institutions on the list has been criminally charged. The issue of co-conspirators was mentioned only in passing at a court hearing on Friday in which a U.S. prosecutor and defense lawyers argued over a review of more than 125 million pages of documents and 670,000 audio tapes in evidence.
The papers were filed by lawyers defending a former employee of CDR Financial Products Inc, also known as Rubin/Chambers, Dunhill Insurance Service Inc.
Executives of CDR were indicted in October on charges of participating in bid-rigging and fraud. A trial is scheduled to start in February next year.
The names of the bankers were not supposed to have been made public even though they were voluntarily provided to the defense by prosecutors. Defense lawyers said they were inadvertently included in a March 25 court filing.
Defense lawyers asked Judge Victor Marrero to remove the names from the record and he granted the request. Marrero is presiding over the criminal and civil matters related to this case in Manhattan federal court.
Bank of America declined to comment, except to note the bank was granted amnesty in 2007 by the Justice Department for self-reporting prior to the industrywide investigation.
A spokesman for JPMorgan Chase declined to comment. A spokeswoman for Wells Fargo, which now owns Wachovia, declined to comment, as did a spokesman for UBS and a spokesman for Societe Generale. Citigroup also declined to comment.
On Thursday, in a consolidated civil lawsuit over allegations of bid rigging, limited competition and price fixing in the municipals market, Marrero ordered about a dozen banks and financial firms to defend the case.
In 2006, the U.S. Justice Department, Internal Revenue Service and Securities and Exchange Commission launched a sweeping investigation into how certain derivatives, known as guaranteed investment contracts, had been priced.
While the investigation cooled down by early 2009, it has heated up in the last few months. At the same time, a number of counties and cities sued the companies involved.
The cases are U.S. v Rubin/Chambers Dunhill Insurance, Services Inc No. 09-1058, In re Municipal Derivatives Antitrust Litigation and Hinds County, Mississippi v Wachovia Bank et al No. 08-2516 and 08-md-1950 all in U.S. District Court for the Southern District of New York.
(Reporting by Caroline Humer, Grant McCool, Elinor Comlay, Joe Giannone in New York and Joe Rauch; editing by Steve Orlofsky and Andre Grenon)