The bad news: Peter Ghavami is going to spend some time in prison. The goods news: it's way less than the 21 years prosecutors were hoping for. So that's something!
Ghavami, the former co-head of UBS's municipal bond reinvestment and derivatives desk, was handed the 18 month sentence by U.S. District Judge Kimba Wood of the Southern District of New York. Prosecutors had sought about 17 to 21 years, a much harsher sentence that would have been longer than the 11-year term given in 2011 to Galleon hedge-fund founder Raj Rajaratnam for his insider-trading conviction. The judge also fined Mr. Ghavami $1 million, significantly more than prosecutors had been seeking in his case. After Mr. Ghavami serves his sentence, he would be deported to Belgium.
Two other UBS former muni-bond officials were expected to be sentenced later Wednesday: Gary Heinz, a former vice president on UBS' municipal reinvestment desk, and Michael Welty, another former vice president. Prosecutors were seeking about 19 to 24 years for Mr. Heinz and about 11 to 14 years for Mr. Welty. Last summer, a Manhattan jury found the three men guilty of leading a scheme that caused municipalities to pay millions of dollars more for bond deals. Proceeds of local government bond sales were reinvested into investment products that banks compete to sell. During sentencing proceedings Wednesday, Ms. Wood described the three men as "part of a corrupt corporate culture that spanned years."