A federal judge in New York sentenced CDR Financial Products Inc. founder David Rubin to two years' probation Wednesday and ordered him to pay a combined $5.65 million in fines and restitution for his role in rigging bids for municipal bond contracts.
Rubin will not serve any prison time.
"I have deep remorse and great regret for my actions," Rubin, voice cracking, told the court.
Judge Kimba Wood imposed the sentence Wednesday afternoon in the U.S. District Court for the Southern District of New York in Manhattan.
Rubin was ordered to pay $2.15 million in restitution for fraudulently obtained interest rates and kickbacks disguised as swap fees.
He was also ordered to pay $1.5 million as an individual fine, and will personally back a $2 million fine to CDR, because the firm has no assets and only exists on paper.
Rubin, 52, pleaded guilty in January 2012 to three criminal counts dating back to the start of the millennium. The counts were conspiracy to allocate and rig bids for investment agreements and other municipal finance contracts, defrauding muni issuers and the Internal Revenue Service, and wire fraud.
Rubin's case is part of a federal investigation of bid-rigging in the municipal bond market.
General Electric Co., Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co. and UBS AG have paid more than $700 million in restitutions and fines.
He became a cooperating witness and testified in the trial of former bankers Peter Ghavami, Michael Welty and Gary Heinz, who are appealing their August 2012 conviction on the grounds that the government withheld evidence.
All three were convicted of rigging bids for contracts for investing proceeds of municipal bond sales and sentenced to prison terms. They have asked for a new trial, saying the government claiming the government suppressed an email that could have allowed Welty to challenge some government claims.
Former General Electric bankers Dominick Carollo, Steven Goldberg, and Peter Grimm, convicted in May 2012, are out of jail after an appeals court ruled the statute of limitations on their charges had expired before the government charged them with criminal counts.
Rubin's sentencing was finalized after a half-hour recess during which defense and prosecution attorneys worked out a compromise that was accepted by Wood.
Prosecutors had sought $11.5 million in restitution.
Wood, a federal judge for 26 years, sentenced "junk bond king" Michael Milken to 10 years in 1990 — although Milken only served two — plus three years' probation. President Clinton considered Wood for U.S. attorney general in 1993, but withdrew after a controversy over her hiring of a foreign-born nanny.
