WASHINGTON – A fourth market participant, Mark Zaino, has pleaded guilty to participating in bid-rigging and fraud conspiracies in connection with municipal investment contracts and derivatives, the Justice Department announced Wednesday.
Zaino, who formerly worked on the muni derivatives and guaranteed investment contract desk at UBS AG, engaged in the bid-rigging conspiracy from as early as October 2001 until March 2006, Justice officials said. He is charged with one count of conspiracy to restrain trade, one count of conspiracy and count of wire fraud. But has agreed to cooperate with the department’s ongoing antitrust investigation of GICs and derivatives in the municipal market.
The government contends that CDR Financial Products Inc. coordinated the bid-rigging scheme. In October, a grand jury indicted the firm, its founder David Rubin, former chief financial officer Zevi Wolmark, and vice president Evan Andrew Zarefsky. The firm and the three men deny they did anything illegal.
As part of the conspiracy, Zaino acted as a broker of investment agreements, and co-conspirator providers designated in advance which provider would be the winning bidder for certain GICs brokered by UBS.
The firm’s name was not identified in court filings or in October’s indictment, in which UBS is identified only as “Financial Institution A.”
Market participants noted that Zaino worked as a vice president for CDR, then known as Chambers, Dunhill, Rubin & Co., prior to his job at UBS, which he began in spring 2001.
Three other former CDR employees have pleaded guilty to criminal charges and have agreed to cooperate with investigators. They are Matthew Adam Rothman and Douglas Alan Goldberg, former CDR vice presidents, and Daniel Naeh, who has not worked for the firm in years but was living in Israel and acting as a bidding agent on muni deals.
A spokesman for UBS was not immediately available to comment.
