Gavel and judgement on desk

A former trader has been indicted on fraud charges for allegedly attempting to manipulate the U.S. Treasuries market.

A federal grand jury returned an indictment charging Jeyakumar Nadarajah, 39, who was formerly director and head of Treasuries trading at TD Securities (USA) LLC, with two counts of wire fraud, seven counts of securities fraud and seven counts of securities manipulation.

According to court filings, between April 2018 and May 2019, Nadarajah allegedly engaged in a scheme involving spoofing and layering tactics to mislead the secondary market for U.S. Treasuries.

Specifically, it’s alleged that Nadarajah “[placed] orders that he did not intend to execute in order to create the appearance of false supply and demand, and to fraudulently induce other market participants to trade at prices, quantities, and times that they otherwise would not have traded.”

According to regulatory filings, Nadarajah was terminated by TD in June 2019 after almost 11 years at the firm for activities that allegedly violated the firm’s policy. The policy “prohibits the placement and subsequent cancellation of a quote in an attempt to trigger market movement to the advantage of the market participant.”

The allegations have not been proven, and he is presumed to be innocent.

“Securities fraud and manipulation, as alleged here, victimize investors and degrade the integrity of our public securities markets,” said acting assistant attorney general, Nicole Argentieri, of the Justice Department’s criminal division, in a release announcing the charges.