A former Cantor Fitzgerald Managing Director was cleared of charges that he defrauded customers by lying about prices of mortgage-backed securities, dealing federal prosecutors another blow in their efforts to tame questionable practices used by bond traders.
Bloomberg News reports that David Demos, 36, was found not guilty Thursday of securities fraud by a federal jury in Hartford, Connecticut.
Prosecutors claimed Demos lied to his customers about the prices at which his company could buy or sell mortgage bonds, boosting the profit his firm earned on a trade and therefore increasing his own bonus.
Bloomberg also reports that a federal appeals court once again reversed the conviction of a former Jefferies Managing Director who is serving prison time for lying to customers about the prices of mortgage-backed bonds.
It’s the second time in 2 1/2 years that the federal appeals court has tossed out the conviction of Jesse Litvak. He is currently in the midst of a two-year term in a federal prison camp in Florida. The appeals court ordered him released on bond.