<span class="articleLocation”>A former Jefferies Group Inc bond trader being
tried a second time for defrauding clients about prices of
mortgage bonds should be convicted because he lied repeatedly to
his own customers to boost profits, a U.S. prosecutor argued on
Jesse Litvak, 42, was “motivated by greed,” and it was no
excuse that other traders might have deceived their own
customers, Assistant U.S. Attorney Jonathan Francis told a
federal jury in New Haven, Connecticut in his closing argument
as the retrial neared its end.
“Even a child knows that ‘Billy did it too’ isn’t an excuse
for bad behavior,” Francis said. “A grown man knows that lying
to cheat people is the wrong thing to do.”
Litvak’s lawyers have not yet given their closing argument.
They have contended that Litvak’s customers were sophisticated
enough to know if he was cheating them, and relied on other
factors in deciding when to buy and sell and at what
Jurors are expected to soon begin deliberating the fate of
Litvak, who had worked in Jefferies’ office in Stamford,
Connecticut and was first charged in January 2013.
The securities fraud case signaled the start of a federal
crackdown on suspect negotiating tactics by bond traders, and
its outcome could affect cases against six other former traders.
Three from Nomura Holdings Inc face an early May
trial, one from Cantor Fitzgerald & Co was charged last month,
and two from Royal Bank of Scotland Group Plc pleaded
guilty. An acquittal of Litvak could lead to a withdrawal of
Prosecutors accused Litvak of misleading customers about
bond prices from 2009 to 2011.
They said this caused customers to overpay for bonds they
bought and be paid less for bonds they sold, leading to roughly
$2.25 million of improper profit for Jefferies, a unit of
Leucadia National Corp.
Litvak was convicted of securities fraud and defrauding the
government in March 2014 and sentenced to two years in prison.
A federal appeals court overturned the conviction in
December 2015, but said prosecutors could try again to prove
The appeals court also said that unlike at the first trial
however, Litvak could offer expert testimony that his customers
were sophisticated, and relied on multiple factors when buying
and selling bonds, not just on statements he made.
Lawyers for Litvak presented such testimony this week, but
as at the first trial Litvak did not take the stand.
The case is U.S. v. Litvak, U.S. District Court, District of
Connecticut, No. 13-cr-00019.
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