The outcome of a prosecution for bond-bid rigging before Judge Wood in the US District Court for the Southern District of New York was reported in the Australian newspaper of 26 July 2013 at p. 24.


A component of the process of bond trading allows local governments to raise money from investors using bond deals, then investing the proceeds in investment products which banks and others sell off in a competitive process.

Between 2001 and 2006 three employees of UBS – Peter Ghavami, Gary Heinz and Michael Welty – concocted a scheme which resulted in municipalities being substantially overcharged in connection with these deals (according to the government, US$25,000,000.00).


The accused were convicted by a jury of the charges brought against them. The government had sought particularly severe penalties, including over a decade of imprisonment, perhaps as a reflection of the severe financial hardship being caused by municipal financial woes (1).


In sentencing, Judge Wood sentenced the accused as follows –
* Ghavami: 18 months imprisonment and a $1,000,000.00 fine. Her Honour noted that Ghavami faces deportation to Belgium.
* Heinz: 27 months imprisonment and a $400,000.00 fine
* Welty: 16 months imprisonment and a $300,000.00 fine


(1) See Mark Curriden, ‘The Next Chapter’, 97(11) A.B.A. Journal 51 (2011).