Tuesday, November 30, 2010

8th Conviction in Muni-Bond Scandal

And the hits just keep on coming:

Nov 30 (Reuters) - A former JPMorgan Chase & Co. (JPM.N) vice president, James Hertz, has pleaded guilty to bid rigging and fraud in investment contracts for municipal monies.

The Justice Department said that Hertz pleaded guilty to one count of wire fraud, and agreed to cooperate with its investigation into accusations that companies decided in advance which investment house would win the auctions of guaranteed investment contracts, which cities and counties buy with the proceeds from municipal bond sales.

Often, there is a delay between when bonds are floated and when the money is actually paid out, allowing some time to invest it.

Considering the key role Chase played in the whole muni-bond scandal this isn't much of a surprise.

1 comment:

  1. This is a perfect example to promote going back to a heavily regulated muni-bond financial industry.
    Heck, we even have ex-politicians coordinating muni-bonds for cash payoffs for God sakes!