JPMorgan Chase & Co.'s former head of municipal derivatives sales disclosed that he was a target of a federal criminal investigation into anti-competitive conduct in the public finance market.
Douglas MacFaddin, who worked at JPMorgan for 14 years, was fired by the New York bank in March after revealing he was a target of the probe into Wall Street’s sales of derivatives and investment contracts to state and local governments, records with the Financial Industry Regulatory Authority show.
MacFaddin is one of at least three former JPMorgan bankers who may be indicted as part of the widest criminal probe of the municipal market.
At least 10 current and former bankers at JPMorgan, Bear Stearns Cos., Deutsche Bank, UBS and Wachovia Bank have been notified that they are targets of federal criminal investigations.
U.S. prosecutors and the Securities and Exchange Commission have been searching for more than a year for evidence of rigged bidding and other misconduct by banks that sell investments and derivatives, such as interest-rate swaps, tied to municipal bonds.
JPMorgan, in its annual report, said the investigations focused on “possible antitrust and securities violations,” mostly from 2001 to 2006.