WASHINGTON — Piper Jaffray Cos. disclosed late Thursday that a former employee has been notified by the Justice Department that he is the target of its investigation of anticompetitive practices in connection with the derivatives and investment areas of the municipal market.
The firm made the disclosure in a 10-K financial filing it made with the Securities and Exchange Commission, saying it has received subpoenas and requests for information from the Justice Department and the SEC “which are conducting broad, industry-wide investigations of anticompetitive and other practices relating to the marketing, providing or brokering of contracts involving the investment or reinvestment of proceeds of certain tax-exempt bonds issues, including guaranteed investment contracts, derivatives, and other investment securities.”
The filing does not name the former employee. It only says, “In December 2007, the DOJ notified one of our employees, whose employment subsequently was terminated, that he is regarded as a target of the investigation.”
However, regulatory information obtained by The Bond Buyer indicates the individual may be James H. Towne, who has been managing director at Piper Jaffray Municipal Derivatives in Minneapolis.
Towne or the firm received a notification Dec. 15 from the Justice Department’s antitrust division relating to “potential antitrust and other violations involving contracts related to municipal bonds,” according to the information.
Neither Piper Jaffray nor Towne could be reached for comment.