It became known about the arrest of the former top manager of the Swiss bank UBS, Peter Gavami in the United States; most recently he was the head of global markets of management investment company Troika Dialog. According to the U.S. Department of Justice, a well-known investment banker is involved in the criminal case of fraud with municipal securities. Mr Gavami is facing up to 20 years imprisonment and heavy fines.
A citizen of Belgium, Peter Gavami has been living in Russia for the last few years; FBI agents arrested him on Dec. 1 at New York's JFK airport, where he arrived from Moscow. According to documents released by the U.S. Department of Justice, the investment banker had been wanted by authorities of that country for complicity in the fraud with municipal securities. And in the case he goes under two names - Gavami and Gavamilahidzhi.
On December, 2 at the court of the Southern District of New York (recently it detained a Russian citizen Viktor But), formally charged Peter Gavami with fraud. In accordance with the criminal case materials (it was instituted against him on Sept. 16, 2010), Mr. Gavami "participated in a scheme to deceive the issuer of municipal bonds." The indictment document states that from January 2001 to March 2004, Mr. Gavami worked in the division of some financial companies, taking up the post of managing director and head of the department engaged in repeated investment in municipal bonds and derivatives. He was "involved in the implementation of the fraudulent scheme from October 24, 2001 to February 11, 2002”.
As the report of the Justice Department says, the issuer of municipal bonds hired a unit where Mr. Gavami worked as a broker, whose main task was to conduct a tender to invest funds raised through the issuance of municipal bonds. Mr Gavami determined the winner of the tender in exchange for a bribe to the employer. A bribe of $ 100 thousand was paid as a reward in exchange for helping Mr. Gavami in managing the tender process and control over it. As reported by the Ministry of Justice, defendant is facing 20 years of imprisonment and a fine of $ 250 thousand.
The Justice Ministry added that together with Mr. Gavami other eight employees of the Bank of America Corp., UBS and JP Morgan Chase & Co. are targeted in the case which is led by the the FBI, Antitrust Division of the Department of Justice and the IRS. They have already pleaded guilty and actively cooperate with the investigation. Note that prior to his movement to Russia, as it says on the website of Troika Dialog, Mr. Gavami worked at JP Morgan, "where he was responsible for conducting transactions with derivatives to institutional clients, as well as in New York and London offices of UBS , where he served as managing director. ", Peter Gavami was appointed the head of the department of global markets at Troika Dialog in September 2009, soon after South Africa's Standard Bank had acquired 33% stake in Russian investment company (later the proportion had increased to 36.427%). Being at that post, he oversaw all operations for securities trading. Prior to that, Mr. Gavami served as General Director in Russian and the CIS group Standard Bank, as well as the general director of ZAO "Standard Bank".
The press service of the Troika Dialog could not comment on the purpose of the visit of Mr. Gavami in the U.S. In addition, they noted that the charges against their top manager, related to the period when he had not worked for the company yet, so «it is impossible to comment on this information."
market participants called "extremely unpleasant fact" for the company the charges brought against one of the key employees of Troika Dialog, however, they did not believe that the consequences of those events could have affected the image of the "Troika" seriously and its clients attitude. "Division of Global Markets, employing Mr Gavami, is largely focused on providing services to clients in Russia, and their reaction to such news is indifferent," the managing partner of investment company "Third Rome", Andrey Movchan notes. "The Russian clients are less responsive to the perception of such things, beside, the fraudulent scheme, for the use of which Peter Gavami has been accused, were used eight years ago and have no relation either to the" Troika ", nor to Russia at all", Mr. Gavrilenko agrees. However, he does not rule out that foreign customers will now "look closely to the company because they are more sensitive to such things and every little thing is important to them to make decisions related to money." According to Mr. Movchan, "more important is the impact that the detention of Peter Gavami has on work of the Division of Global Markets, which he headed, because the vast line of business is still without a leader." "Meanwhile they talk about the charges only, thus they would require a trial. It is possible that everything will end up with apologizing to him," Mr. Movchan said.
Source: Kommersant, 04.12.2010