Ex-Jefferies MD asks judge to throw out fraud charges

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Ex-Jefferies Managing Director Jesse C. Litvak has asked a federal judge in Connecticut to throw out charges that he defrauded customers of more than $2m on trades of residential mortgage-backed securities.

Bloomberg reports that Litvak, who has pleaded not guilty, was indicted in January on charges of securities fraud, fraud connected to the Troubled Asset Relief Program and making false statements to the federal government.

Alleged victims include investment funds, among them six established by the U.S. Treasury Department in 2009 as part of its response to the financial crisis.

Prosecutors accuse Litvak of misrepresenting the asking price of sellers of residential mortgage-backed securities to buyers or vice versa, keeping the difference for Jefferies. Litvak’s attorneys asked U.S. District Judge Janet C. Hall to dismiss the charges during a hearing in New Haven last week.

Patrick Smith, Litvak’s attorney, argued that any misstatements are immaterial to the case because the indictment doesn’t address how investors were 'cheated out of something'.

'There is no allegation that what was sold was misrepresented', Smith said.

To access the complete Bloomberg article hit the link below

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