DALLAS - The U.S. Justice Department is investigating a 2002 bond sale by the University of New Mexico as part of an investigation into possible violations of securities laws, officials said.

In a widening look at practices in the pricing of derivatives, investigators have subpoenaed records from more than 30 banks, insurance companies, and brokers involved in interest rate swaps and contracts to invest bond-sale proceeds.

In New Mexico, officials asked for records from the 2002 sale of $96.7 million of subordinate-lien system revenue bonds issued by the UNM Regents. The bonds were sold in two tranches, $96.7 million and $37.8 million, through negotiation with JPMorgan as senior manager with RBC Capital Markets and George K. Baum & Co. as co-managers.

The university confirmed that the records were subpoenaed but said it was not a target of the investigation.

"The University of New Mexico is not a subject of any criminal investigation," said spokeswoman Susan McKinsey. "The university received a subpoena from the Department of Justice to produce documents relating to the university's issuance of bonds in 2002. It is our understanding that the Department of Justice's request for the documents is not directed at the university's activities in issuing the bonds."

JPMorgan spokesman Brian Marchiony declined comment.

In a separate investigation by the U.S. attorney's office in New Mexico, a federal grand jury is reportedly looking into CDR Financial Products Inc. contributions to political action committees run by Gov. Bill Richardson in exchange for state municipal derivatives business.

The grand jury probe involving contributions to the PACs run by Richardson, President-elect Barack Obama's nominee to head the Commerce Department, was first reported by the Albuquerque Journal and comes amid a federal probe of alleged bid-rigging, price-fixing, and other practices in the municipal market that violate antitrust laws.

The probe has been ongoing since at least the fall of 2006 and involves dozens of banks, investment banks, advisory firms, and individuals. Grand jurors are reportedly focusing on the $1.5 million in fees CDR received from the New Mexico Finance Authority in 2004 after the firm and its president, David Rubin, contributed about $100,000 to PACs run by Richardson.

A spokesman for the Justice Department in Albuquerque has declined comment.

CDR was swap adviser on derivatives issued in conjunction with a $1.6 billion bond transaction that was sold in two phases. First Southwest Co. was a financial adviser for the bond deal. Both companies have declined comment.

The grand jury comes after the Federal Bureau of Investigation raided CDR's Beverly Hills headquarters in November 2006, along with the offices of two other investment advisory firms - Investment Management Advisory Group Inc. in Pottstown, Pa., and Sound Capital Management Inc. in Eden Prairie, Minn.

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