A Wall Street trader who deceived his firm’s clients on the prices for mortgage bonds was sentenced to probation and community service.
A U.S. district court judge sentenced Michael Gramins, a former trader with Nomura Securities International in New York, to two years of probation and 300 hours of community service.
In 2017, a jury convicted Gramins on one count of conspiracy to commit securities and wire fraud.
It also acquitted him on several other charges of securities fraud and wire fraud, and could not reach a verdict on two other fraud charges.
According to the U.S. Department of Justice (DoJ), Gramins deceived his firm’s clients — including hedge funds, insurers and asset managers — by misrepresenting bond prices to induce the customers to pay higher purchase prices, and to sell bonds at lower prices, generating illegal profits for the firm.
“Gramins trained subordinates to lie to customers, provided them with the language to use in deceiving customers, and encouraged them to engage in the practice,” the DoJ said in a release.
In a settlement with the U.S. Securities and Exchange Commission in 2019, Nomura agreed to pay approximately US$25 million in restitution to customers and a US$1.5-million penalty for failing to adequately supervise its traders.