Jesse Litvak, 42, was “motivated by greed,” and it was no
excuse that other traders might have similarly deceived their
own customers, Assistant U.S. Attorney Jonathan Francis told
jurors in New Haven, Connecticut in his closing argument on
“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.”
In contrast, defense lawyer Dane Butswinkas emphasized how
Litvak’s customers were sophisticated investors who relied on a
bevy of computer models and economists, and that Litvak’s “banter” was not so material to their decision making.
“They’re very skeptical about things they cannot verify,”
Butswinkas told jurors. “These are people who are crossing T’s
and dotting I’s.”
The five-man, seven-woman jury resumes deliberations on Jan.
Litvak had worked in Jefferies’ office in Stamford,
Connecticut, and was first charged in January 2013.
His 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.
Prosecutors accused Litvak of misleading customers including
AllianceBernstein and Soros Fund Management about bond prices
from 2009 to 2011, to make more money for his employer and
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
10 securities fraud counts.
Unlike at the first trial, Litvak was allowed to, and did,
offer expert testimony about his customers’ sophistication.
Litvak did not take the stand at either trial.
The six traders similarly charged include three from Nomura
Holdings Inc facing an early May trial, one from Cantor
Fitzgerald & Co charged last month, and two from Royal Bank of
Scotland Group Plc who pleaded guilty. An acquittal of
Litvak could lead to a withdrawal of those pleas.
The case is U.S. v. Litvak, U.S. District Court, District of
Connecticut, No. 13-cr-00019.
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