David Rubin, founder of CDR Financial Products Inc., and two colleagues on Friday pleaded not guilty to criminal antitrust, wire fraud and other charges stemming from an alleged conspiracy to rig bids for municipal investment agreements and derivatives contracts for kickbacks.
A federal magistrate judge in Manhattan set bail for Rubin at far less than U.S. attorneys requested.
In remarks that likely foreshadow the arguments that will be made against the charges, Michael McGovern, a partner at Ropes & Gray LLP representing Stewart Wolmark, CDR’s former chief financial officer and managing director, claimed that the government’s portrayal of CDR as an entity at the center of a massive bid-rigging conspiracy is far-fetched.
The case is the first to be brought in the Justice Department’s widespread probe of anticompetitive practices in the muni market, under which 30 to 40 firms and a number of individuals were subpoenaed for information.
But McGovern asked, if there’s a widespread conspiracy, why did the government not name individuals from any other firms? He also suggested that a five-year statute of limitations will lead to the removal of some of the charges.