A U.S. government crackdown on bond traders using questionable tactics resurfaced in a Connecticut courtroom at the trial of a former Cantor Fitzgerald managing director who is charged with lying to his customers.
Bloomberg News reports that David Demos is one of more than a half-dozen traders who were charged with deceiving clients, in this case about the prices his firm could pay for mortgage-backed securities, or how much it could sell them for, in order to increase commissions to boost his pay.
"He lied to his customers to steal their money," Assistant U.S. Attorney Jonathan Francis told jurors during opening statements on Monday. "By lying he made more profit for Cantor. And by making more profit for Cantor, the defendant made more money for himself."
Demos’s attorney, Jose Baez, previewed a defense which insisted that his misstatements weren’t "material," or important enough to his customers, that it would influence their investment decisions.
In his opening statement, Baez called the alleged victims in the case "profiteers" who made millions of dollars, lost no money and are still happy with the trades.
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