REUTERS-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
Friday.
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
prices.
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 (8604.T)
face an early May trial, one from Cantor Fitzgerald & Co was charged last
month, and two from Royal Bank of Scotland Group Plc (RBS.L)
pleaded guilty. An acquittal of Litvak could lead to a withdrawal of those
pleas.
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 (LUK.N).
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 securities fraud.
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.
REUTERS
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