BofA's Phillip Murphy Pleads Guilty to Bond Market Manipulation

Phillip D. Murphy, a former Bank of America executive, has pleaded guilty for attempting to manipulate the bond markets through the product bidding process.

Prosecutors revealed that the former head of the BofA's municipal derivatives desk pleaded guilty to conspiring to defraud bond investors and the US government by colluding with other traders to rig the process in how banks set prices.

"By manipulating what was intended to be a competitive bidding process, the conspirators defrauded municipalities, public entities and taxpayers across the country," said Brent Snyder, a Justice Department prosecutor, in an e-mailed statement to Bloomberg.

Murphy's lawyer, Susan Necheles, also told the news agency that "by pleading guilty, Murphy hopes to begin to put this behind him and move forward in his life."

Murphy's case is the latest development in the US government's multi-year investigation into how banks and individuals tried to manipulate bond markets but fixing the bidding process for investment agreements covering municipal-bond proceeds.

So far, the US government has recouped $743m (£451m, €545m) from BofA, JPMorgan, UBS, Wells Fargo and General Electric after they admitted knowledge that former employees engaged in illegal activity in connection with the scheme.

Elsewhere, authorities are cracking down on alleged market manipulation and in Europe Danske Bank suspended four traders, and two of their bosses, after the firm and Danish regulator found that the group had violated internal rules and may potentially have manipulated bond market prices in 2009.