Former Jefferies Trader Seeks to Toss Fraud ConvictionChris Dolmetsch
Former Jefferies & Co. Managing Director Jesse Litvak asked a judge to throw out his conviction in the only criminal case against an individual in connection with a U.S. program that used bailout funds to spur investment in mortgage-backed securities.
Litvak, 39, of New York, was found guilty by a federal jury on March 7 of securities fraud and making false statements as well as fraud connected to the U.S. government’s Troubled Asset Relief Program following a trial before U.S. District Judge Janet C. Hall in New Haven, Connecticut. He is scheduled to be sentenced May 30.
Litvak misrepresented how much sellers were asking for securities and what customers would pay, and pocketing the difference for Jefferies, prosecutors said.
Evidence in the case showed “sophisticated professional investment managers” like the ones who Jefferies dealt with make their investments based on their own analysis and that the firm’s profits wouldn’t have mattered, lawyers for Litvak said in a court filing dated yesterday asking for a reversal of the verdict or a new trial.
The evidence shows Litvak’s “alleged misrepresentations would not be material to a reasonable professional investment manager’s decision in choosing to purchase or not purchase, sell or not sell,” his lawyers wrote.
Litvak is the only person to have been charged with fraud in relation to the Public-Private Investment Program, an initiative that used more than $20 billion from TARP to spur investment in mortgage-backed securities that stayed on the books of financial institutions.
The U.S. Attorney’s Office for the District of Connecticut will respond to Litvak’s bid in court, spokesman Thomas Carson said in an e-mail.
The case is U.S. v. Litvak, 13-cr-00019, U.S. District Court, District of Connecticut (New Haven).