A former Nomura trader was found guilty of conspiring to lie to clients about mortgage-bond prices, while another was cleared of all charges in a verdict that highlights the challenge of policing fraud in the market.
Bloomberg News reports that Michael Gramins was convicted of conspiracy and cleared of six fraud counts, while the jury was hung on two other charges. Tyler Peters was acquitted on all nine charges. Jurors cleared a third trader, Ross Shapiro, of eight counts of fraud, but deadlocked on one. Prosecutors must decide whether to retry Shapiro on one count and Gramins on two.
Thursday’s mixed verdict in Hartford, Connecticut supports the government’s claim that lying to even the most-sophisticated customers can amount to securities fraud -- a widespread practice among bond traders until prosecutors launched their crackdown 4 1/2 years ago. But the outcome also underscores how difficult it is for prosecutors to prove their case.
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