Banks ordered to compensate UNM

UNM and four other New Mexico businesses will receive monetary settlements from bid-rigging allegations.

A federal investigation revealed UBS Financial Services LLC and J.P. Morgan Securities LLC were rigging bond bids to sell bonds for less than fair market value. The banks will pay more than $1.4 million to New Mexico businesses to settle the bid-rigging claims.

“The federal Securities and Exchange Commission is conducting a nationwide antitrust investigation focused on alleged bid-rigging in the municipal bond industry,” said Susan McKinsey, University spokeswoman.

Some of the bonds in question were UNM bonds from over the past decade, summing to nearly $22 million that was issued in an effort to refinance older bonds that had been used towards building renovations on campus, McKinsey said.

“JP Morgan was the lead underwriter in UNM’s 2003 series bonds that refinanced bond issues from the 1990s, which had funded academic and research buildings like Manufacturing Training and Technology, as well as the renovation of Johnson Center,” she said.

Other uses of bond investments over the last decade include work on a UNM Health Sciences Center, other building renovations and student loans, McKinsey said.

UNM student Sonnie Williams said many students don’t know much about the University’s funding.

“This is a very difficult situation for me to grasp,” Williams said. “I don’t feel like the average student at UNM knows what goes on in terms of bonds and investments. Hearing about this issue definitely makes me want to learn more about this larger scale of finances that obviously play a big part in what makes large universities function and run, such as renovations and new buildings and student loans.”

McKinsey said the settlement is part of a much larger financial settlement that spreads over 30 states and includes 193 different bond transactions.

The United States Justice Department announced a settlement in May totaling $160 million from UBS, and settled for $200 million from JP Morgan in June in exchange for a cooperative investigation and avoidance of prosecution.