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Ex-UBS banker arrested in United States

A former executive of Swiss bank UBS faces a charge of fraud stemming from a scheme steering an investment agreement with a US state to another bank.

The US Justice Department said Peter Ghavami, a Belgian national, was arrested in New York on Wednesday after arriving on a flight from Moscow.

Ghavami, who was with UBS until 2007, is the second former employee of the bank to be ensnared in the federal price-fixing probe of investment contracts governments buy with money raised in the $2.8 trillion (SFr2.77 trillion) municipal bond market.

He served as co-head of the UBS municipal bond reinvestment and derivatives desk before becoming the commodities chief.

Ghavami faces up to 20 years in prison and $250,000 in fines if convicted, officials said. The alleged scheme took place between October 2001 and February 2002.

“Pernicious fraud schemes like the one alleged in this complaint undermine the public’s confidence and trust in the municipal bond and derivatives markets,” Christine Varney, the department’s antitrust division chief, said in a statement on Thursday.

US authorities have been carrying out a wide-ranging investigation of the municipal bond market that to date has produced eight guilty pleas.

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