The Securities and Exchange Commission on Friday charged GE Funding Capital Market Services, a unit of General Electric Co., with securities fraud, in a case that resulted in two settlements totaling about $70 million.
A top D.C. antitrust lawyer negotiated the settlements, including one between GE Funding and the SEC for $25 million, and another between GE Funding and the Antitrust Division of the Justice Department, the Internal Revenue Service, and a coalition of 25 state attorneys general for just over $45 million.
William Baer, partner and chair of Arnold & Porter’s antitrust and competition practice, helped GE Funding settle charges that the company engaged in anticompetitive conduct in the municipal bonds investment market, according to a Dec. 23 letter to Baer from Acting Assistant Attorney General Sharis Pozen. Baer declined to comment for this story.
As part of the settlement, GE Funding admitted responsibility for manipulations of the bidding process of municipal bond reinvestments that took place between August 1999 and October 2004. GE Funding won numerous bids by obtaining information on rivals’ bids and either lowered their bid to increase their profit or raised the bid to edge out the competition.
“Our in-depth investigations have uncovered pervasive corrupt practices in the municipal securities reinvestment market, and we are requiring financial firms one by one to step up and pay the price for their misconduct,” Robert Khuzami, director of the SEC’s Division of Enforcement, said in a written statement.