The municipal bond market scandal continues to spawn guilty pleas. This time Zevi Wolmark, the former chief financial officer and managing director of Rubin/Chambers, Dunhill Insurance Services or CDR, and Evan Zarefsky a CDR vice president, pleaded guilty to criminal charges. Previously, David Rubin, the founder and president of the firm, pleaded guilty in the on-going investigation by the DOJ and other agencies, including the SEC.

CDR was retained by participants in the municipal bond market to conduct what was suppose to be a competitive bidding process for the investment of municipal bond proceeds. In fact, the two men admitted as part of their guilty pleas that they rigged the process so that their clients were deprived of the service for which they contracted.

These are just the latest in a series of guilty pleas by individuals in connection with the rigging of the auction process in this market. Previously, 12 individuals pleaded guilty in connection with this investigation. Six individuals, three formerly of GE Funding Capital Markets, and three formerly of UBS, are awaiting trial on charges stemming from the scandal.

The DOJ and the SEC have also brought actions against firms involved in the bid rigging process. Previously, GE Funding Capital Markets, Wachovia, now known as Wells Fargo, JPMorgan Chase & Co, and UBS AG settled criminal and civil charges based on allegations of bid rigging related to the municipal bond market.

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