Bloomberg reports that Litvak, 39, is on trial in federal court in New Haven, Connecticut, accused of defrauding investors of $2m by lying on trades of mortgage-backed securities. He’s the only person charged with fraud in connection with an initiative to distribute more than $20bn from the Troubled Asset Relief Program, which the U.S. government created during the 2008 credit crisis to help bail out banks.
Joel Wollman, a portfolio manager with QVT Financial LP, testified that he told Litvak that his firm’s limit for a bond purchase was 57 cents on the dollar because anything more than that wouldn’t provide a 10% yield.
Under cross-examination from John Hillebrecht, one of Litvak’s attorneys, Wollman admitted he told another broker that he’d get a 10% yield at 58 cents on the dollar, and that he wasn’t telling the whole truth to Litvak. The charges against Litvak include claiming that a third party was selling the bonds when Jefferies was the actual holder.
'Volunteering information would not give me an edge, keeping information would give me an edge', Wollman said.
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image: © Clyde Robinson