A trader who allegedly lied to investors about the prices of mortgage bonds has had some of his convictions overturned. The 3-0 decision was handed down by the U.S. Court of Appeals for the 2nd Circuit in New York on Dec. 8.
In the case, prosecutors had argued that the man's alleged lies made the government a victim. Some of the investors who were customers of the trader handled money for the Troubled Asset Relief Program. The prosecutors had argued that the man's actions led to an impediment in restarting the debt market for mortgages.
The appellate judges ruled that the trial court judge committed prejudicial error by excluding expert witness testimony for the defendant at his trial. The expert witness reportedly would have testified that the investors were savvy and likely to be wise to the fact that the trader's claims were not believable. The court ordered that the trader be given a new trial to face the original 10 charges of securities fraud. One fraud count filed with TARP allegations was dismissed, as were four convictions for making false statements. The trader has been free on bail pending his appeal.
Federal crimes can carry stiff penalties, including prison time and substantial fines. People who are charged with white-collar crimes, such as fraud, may want to get help from an attorney as soon as possible. Such cases often involve thousands of pages of documents and are extraordinarily complex. An attorney who has experience in defending such cases may be better-equipped to organize the material and to spot weaknesses in the prosecution's case.
Source: Reuters, "RPT-UPDATE 2-Former Jefferies trader Litvak's conviction overturned," Jonathan Stempel, Dec. 8, 2015.