GE unit faces fraud charges

NEW YORK: A unit of General Electric Co and a former subsidiary of Belgian bank Dexia SA were the two unnamed companies that allegedly conspired with a financial adviser charged by the US with rigging auctions on municipal investment transactions, people familiar with the matter said.

Trinity Funding Co, owned by General Electric Capital Corp, and Financial Security Assurance Holdings Ltd were two of four unidentified companies in the Oct. 29 indictment of CDR Financial Products Inc, its founder, David Rubin, and two executives, according to the people, who spoke on the condition of anonymity because they weren't authorized to do so publicly. Trinity and FSA weren't charged.

Two of the unidentified companies paid CDR to win agreements from local governments that hired Rubin's adviser firm from 2002 to 2004, disguising kickbacks by paying his company to broker swaps with two unnamed financial institutions, according to the indictment. The indictment, brought in the federal court in Manhattan, was the first resulting from a more than three-year investigation of the municipal bond industry.