NEW YORK, Dec 30 (Reuters) - The founder and former
president of a California financial products firm pleaded
on Friday to participating in bid rigging and fraud related to
municipal bond contracts.
David Rubin, who founded CDR Financial Products Inc,
admitted to taking part in a scheme in which CDR and its
executives took kickbacks from investment managers to decide in
advance that they would win the right to manage the funds for
Rubin, 50, pleaded guilty to one count each of wire fraud,
conspiracy to restrain trade and conspiracy in Manhattan federal
court. He burst into tears at the end of his hearing.
CDR also pleaded guilty to similar charges on Friday, and
could face a $100 million fine.
"Mr. Rubin and his company engaged in fraudulent and
anti-competitive conduct that harmed municipalities and other
public entities," Sharis Pozen, who leads the U.S. Justice
Department's Antitrust Division, said in a statement.
Rubin faces up to 10 years in prison. No sentencing date was
set, but he is due back in court on April 27.
Two other onetime CDR executives, former chief financial
officer Zevi Wolmark and former vice president Andrew Zarefsky,
are scheduled to go to trial next week.
The three men and the company were charged in October 2009
as part of a broader government probe of the municipal bond
Rubin pleaded guilty after unsuccessfully asking U.S.
District Judge Victor Marrero to delay his trial in order to
care for his wife, who has been diagnosed with terminal cancer,
and his children, all of whom live in California.
"By his plea David Rubin accepts responsibility for his
actions," said his attorney Brad Simon. The lawyer added that
Rubin would now be able to focus his energies on caring for his
family until he is sentenced.
The case is U.S. v. Rubin/Chambers et. al., U.S. District
Court, Southern District of New York, No. 09-1058.
For the U.S.: Rebecca Meiklejohn, Steven Tugander, Eric
Hoffmann, Kevin Hart and Michelle Rindone of the Justice
For Rubin/Chambers: Richard Beckler and Robert Cox of
Howrey and Adam Katz and Bradley Simon of Simon & Partners.
(Reporting by Basil Katz)
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