Prosecutors say the former Jeffries Group managing director bilked customers on more than $2 million in trades of mortgage-backed securities
A former Jeffries Group managing director has been found guilty of defrauding clients on trades of mortgage bonds. The prosecution of Jesse Litvak, 39, was the first under a law banning fraud against the United States under the Troubled Asset Relief Program.
Prosecutors say Litvak bilked customers on more than $2 million in trades of residential mortgage-backed securities between 2009 and 2011. Litvak allegedly misrepresented sellers’ asking prices to buyers and kept the difference for the bank. Among his alleged victims were six investment funds established by the Treasury Department in response to the financial crisis.
A jury today found Litvak guilty of all 15 counts he faced, including 10 counts of securities fraud, according to a Reuters report. He faces up to 20 years in prison on each securities fraud count.
“We're gratified the jury returned the verdict it did,” Assistant U.S. Attorney Eric Glover said, according to Reuters. “Justice was served.”
Litvak’s prosecution was the first under the law banning fraud through TARP. Prosecutors maintained that the United States was defrauded because some of Litvak’s clients participated in a TARP program, Reuters reported.
Jeffries Group, Litvak's former employer, reached a non-prosecution agreement in January under which it agreed to pay $25 million to settle civil and criminal investigations into its trading of mortgage-backed securities.
Prosecutors say Litvak bilked customers on more than $2 million in trades of residential mortgage-backed securities between 2009 and 2011. Litvak allegedly misrepresented sellers’ asking prices to buyers and kept the difference for the bank. Among his alleged victims were six investment funds established by the Treasury Department in response to the financial crisis.
A jury today found Litvak guilty of all 15 counts he faced, including 10 counts of securities fraud, according to a Reuters report. He faces up to 20 years in prison on each securities fraud count.
“We're gratified the jury returned the verdict it did,” Assistant U.S. Attorney Eric Glover said, according to Reuters. “Justice was served.”
Litvak’s prosecution was the first under the law banning fraud through TARP. Prosecutors maintained that the United States was defrauded because some of Litvak’s clients participated in a TARP program, Reuters reported.
Jeffries Group, Litvak's former employer, reached a non-prosecution agreement in January under which it agreed to pay $25 million to settle civil and criminal investigations into its trading of mortgage-backed securities.
