The U.S. Attorney’s Office for the District of Connecticut announced that a federal jury has found Jesse Litvak, a former trader with Jefferies & Co. Inc., guilty of one count of securities fraud stemming from trading in residential mortgage-backed securities (RMBS). He was found not guilty on nine other counts. Litvak is scheduled to be sentenced in the case on April 21.
Litvak was convicted of 10 counts of securities fraud, among other charges, in 2014. On appeal, the other charges were tossed out and he was ordered to face a new trial on the securities fraud charges.
“Once again, a jury of his peers has rejected Mr. Litvak’s claims that he engaged in acceptable sales practices, and determined that his lies were, in fact, criminal behavior,” says U.S. attorney, Deirdre Daly, in a statement. “Our criminal investigation of individuals and institutions involved in fraudulent RMBS trading activities remains active and ongoing. We are confident that these prosecutions have acted as a forceful disincentive to market participants tempted to commit securities fraud.”
The U.S. attorney notes that Jefferies & Co. co-operated with the federal criminal investigation and paid a total penalty of US$25 million as part of a non-prosecution agreement with the government. The firm also addressed deficiencies in its compliance policies and procedures.