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- SEC Adopts Statement and Interpretive Guidance on Public Company Cybersecurity Disclosures
- SEC Charges Former Bitcoin Exchange and Its Founder With Fraud
- JPMorgan Chase to Replace NYC Headquarters with 70-Story Skyscraper
- Citigroup Raises CEO Corbat's Pay 48% to $23Mn
- Should Congress Create a Crypto-Cop?
- JPMorgan Weighs Buying an Exchange-Traded Funds Firm
- Hey, Goldman Sachs: Wanna Buy BNY Mellon?
- SEC Order Rejecting Acquisition of Chicago Stock Exchange (CSX) by Chinese-Baesd Company
- Kyle Moffatt Named Chief Accountant in SEC CorpFinance
- SEC Suspends Trading in 3 Issuers Claiming Involvement in Cryptocurrency and Blockchain Technology
- Karen Garnett, Assoc. Director of SEC CorpFinance, to Leave After 23 Years of Service
- Louisiana Adviser Barred for Hiding Losses from Investors
- Connecticut HF Manager Illegally Diverted Investor Money - Now Owes Nearly $13Mn
- White House Cleaning House of Advisors Without Full Security Clearance
- Goldman Projects 30% Growth in Wealth Management Advisor Force
- Whistleblower Alleges Manipulation of CBOE Volatility Index
- FINRA Looking Into VIX (CBOE Volatility Index) Manipulation: WSJ
- Atlanta-Area Resident Charged with Misusing Investor Funds - SEC
- FINRA Announces 2018 West Region Networking Seminar
- Alberto Arevalo, Associate Director in Office of International Affairs, to Retire From SEC
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NEWSLETTERS & ALERTS
Ex-Jefferies Trader Jesse Litvak Awaits Sentencing for Fraud
[Photo: Jesse Litvak, by Patrick McMullan / WSJ]
In what could be considered a case of double jeopardy, ex-Jefferies bond trader Jessie Litvak awaits sentencing today on his January conviction for having defrauded institutional customers on bond prices. Litvak, who had been a managing director at Jefferies, was accused of generating $2.25 million in illegal profits by lying to customers, including AllianceBernstein and Soros Fund Management, about prices of mortgage-backed securities from 2009 to 2011.
Litvak admitted to lying, but justified his actions on the basis that his customers were sophisticated investors and would know enough to be skeptical if prices that Litvak quoted looked wrong. Prosecutors countered by saying that Litvak was motivated by greed, and that his "lies" caused customers to overpay for bonds they were buying and accept lower prices for bonds they were selling. [See Financialish, 1/27/17]
In his first case, back in March 2014, Litvak ws convicted and sentenced to 2 years in prison. The jury convicted him on all 15 counts - 10 counts of securities fraud, one count of defrauding TARP, and 4 counts of making false statements. However, he appealed and that conviction was overturned in December 2015.
In the second trial, which took place in January 2017, Litvak managed to dodge most of the government’s charges - but he was still found guilty on one count of securities fraud. Based on that conviction, federal prosecutors have asked the federal judge in New Haven, CT, to sentence Litvak to 9 to 11 years in prison. His defense attorneys are seeking 8 years.
IMPORTANCE OF LITVAK'S CASE. Six former traders face similar charges. Four of them pleaded not guilty - Ross Shapiro, Michael Gramins, and Tyler Peters from Nomura Holdings; David Demos from Cantor Fitzgerald. Two pleaded guilty - Matthew Katke and Adam Siegel from RBS - but under some circumstances could have withdrawn their pleas if Litvak had been acquitted.