A U.S. judge on Tuesday threw out the conspiracy conviction of a former Nomura trader accused of lying to customers about mortgage bond prices, a setback for prosecutors in their crackdown on improper sales tactics.
Reuters reports that U.S. District Judge Robert Chatigny’s decision to set aside Michael Gramins’ conviction means both convictions won by prosecutors at trial in their 5-1/2-year probe have now been tossed. Two other traders have been acquitted.
In the meantime, the news agency also reports that a former State Street Corp executive directed a fraudulent scheme to overcharge several of the bank’s clients, including Kuwait’s sovereign wealth fund, by applying secret commissions to billions of dollars’ worth of trades, a U.S. prosecutor told jurors on Tuesday.
Ross McLellan, a former executive vice president, worked with others to overcharge customers using hidden fees that allowed State Street to earn millions of dollars, Assistant U.S. Attorney Stephen Frank told a federal jury in Boston.
Martin Weinberg, McLellan’s lawyer, said his client was innocent of the securities fraud and wire fraud charges he faces.