VTB Capital Hires Ex-UBS Banker Convicted for Bond Rigging

  • Peter Ghavami joins VTB Capital in Moscow for senior Asia role
  • Ghavami was sentenced in 2013 to 18 months for bid rigging

VTB Capital Plc, the investment banking unit of Russia’s second-biggest lender, hired Peter Ghavami, an ex-UBS Group AG banker who was convicted in the U.S. for rigging municipal bond investment deals.

Ghavami, who is based in Moscow, will oversee the firm’s operations in Asia, according to people with knowledge of the role. Ghavami was sentenced to 18 months in prison in July 2013 for rigging what should have been competitive bids and was released in December 2014.

“I am very grateful to VTB Capital to have been given the opportunity to join the organization,” Ghavami said in an e-mailed statement. “With respect to the charges of antitrust violations, I vigorously contested those charges at trial. I believed then, and continues to believe today, that my conduct at UBS was entirely appropriate. Furthermore, these charges relate to events that happened a very long time ago, from 1999 to 2002.”

The U.S. Supreme Court last month declined to hear an appeal from Ghavami and former colleagues who were also found guilty of conspiracy to commit fraud, leaving intact convictions for taking part in the scheme to rig municipal bond investment deals.

The case stemmed from a five-year federal antitrust probe into the $3.7 trillion municipal bond market. Lawyers for Ghavami at the time of the sentencing said the sentence was fair.

Ghavami was released on Dec. 15, 2014, according to U.S. Bureau of Prisons records.

VTB’s former Asian Chief Executive Officer Damian Chunilal left the bank in September 2014. Based in Hong Kong, he was hired to oversee VTB’s expansion plans in Asia, the bank said when Chunilal was hired in 2012.

The Hong Kong regulator, the Securities & Futures Commission, has issued guidelines determining whether it considers individuals "fit and proper" to hold positions in the territory’s financial industry. Those guidelines state that the SFC "is not likely to be satisfied" that an individual who has been convicted of a criminal offense is fit and proper to hold such a position.

VTB Capital offers investment banking services to Russian and international clients. Last year, it advised on Essar Oil Ltd.’s sale of a 49 percent stake in the Vadinar refinery to OAO Rosneft, and counseled a consortium led by China Merchants Holdings International Co. on the acquisition of a 65 percent stake in a Turkish owner of a port facility, data compiled by Bloomberg show.

The firm has operations in London, Singapore, Dubai, Hong Kong, Sofia, New York, with headquarters in Moscow.

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