JPMorgan exec fired in muni probe

The former head of JPMorgan Chase’s (JPM) municipal derivatives sales is the target of a federal criminal investigation of possible anticompetitive actions in the municipal bond market, Bloomberg reports. Douglas MacFaddin was fired last month, Financial Industry Regulatory Authority records show, after he revealed he was a target of a Justice Department probe into Wall Street’s sales of derivatives and investment contracts to state and local governments, Bloomberg reports. MacFaddin is one of 10 current and former traders at JPMorgan and other banks who are being investigated.

The report doesn’t cite any specific deals as having drawn the scrutiny of prosecutors. But a number of cases have come to light recently in which small-town financial officials seem to have gotten in over their heads with exotic Wall Street financing methods. Back in February, Bloomberg reported that the Erie school board had to pay JPMorgan $2.9 million to get out of an interest-rate swap that went sour earlier this decade. And just this month, officials from Jefferson County, Ala., met with federal officials in a bid to stave off a bankruptcy filing, after the county ran into trouble tied to its own bad bets on interest-rate swaps. The good news, such as it is, is that so far the county - home to the state’s biggest city, Birmingham - hasn’t had to resort to a bankruptcy filing.