Nomura Trader Portrayed as Thief at Ex-Colleagues' Fraud Trial

  • Frank DiNucci Jr. is testifying for prosecutors in plea deal
  • Three former traders are accused of lying in negotiations

Attorneys for three ex-Nomura traders on trial for fraud attempted to portray the government’s star witness as a serial criminal who stole money from his mother and lied to prosecutors in an attempt to avoid prison for his own wrongdoing.

Defense attorneys grilled Frank DiNucci Jr. Tuesday during his second day on the witness stand in the trial of his former colleagues Ross Shapiro, Michael Gramins and Tyler Peters. All three are accused of misrepresenting the prices of residential mortgage-backed securities to customers in order to increase the profit their firm made on the trades.

A day after telling jurors that DiNucci was a “desperate” witness and a liar, defense lawyers questioned him about his cooperation with prosecutors as well as his use of money from a joint brokerage account held with his mother. DiNucci, the first witness to testify at the trial, told jurors on his direct examination on Monday that he was trained to lie to clients shortly after coming to Nomura in 2009 by Shapiro, Gramins and others.

The former trader testified that he used money from the joint brokerage account he held with his mother after paying fines and draining his personal savings. He was “embarrassed” and “didn’t have the courage to tell her” that he had been punished by regulatory agencies, he said.

Under questioning by Marc Mukasey, a lawyer for Gramins, DiNucci told jurors he took about $60,000 from his mother.

“I don’t recall the exact number,” DiNucci said, agreeing with Mukasey that the theft was a betrayal of trust.

Ex-Nomura Traders on Trial as Part of U.S. Crackdown: Scorecard

DiNucci, who worked at Nomura until 2012, agreed to plead guilty last month to a single count of conspiracy to commit securities fraud and cooperate with prosecutors in Hartford, Connecticut, after violating a non-prosecution agreement he signed in 2015. He also pleaded guilty in New York to similar federal charges stemming from misrepresentations he made at another firm.

Prosecutors told jurors yesterday that the three defendants lied to their customers from 2009 to 2013 and trained subordinates to do the same thing.

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