| NEW HAVEN, Conn., March 4
NEW HAVEN, Conn., March 4 Lawyers for Jesse
Litvak wrapped up their defense of the former Jefferies Group
Inc trader on federal fraud charges without his taking the
stand, putting the case on track to go to the jury by late
After two weeks of trial, Litvak told Chief Judge Janet Hall
of the U.S. District Court in New Haven, Connecticut, on Tuesday
that he would not be testifying.
Prosecutors accused Litvak, 39, of defrauding customers in a
more than $2 million scheme by misleading them about the prices
of mortgage-backed securities he sold, in a bid to boost profits
The government's case is the first brought under a 2009 law
banning major fraud against the United States through the $700
billion federal bailout known as the Troubled Asset Relief
Program, or TARP.
Prosecutors said the asset manager AllianceBernstein Holding
LP and other participants in a TARP program designed to
revive the market for troubled mortgage debt were among those
defrauded by Litvak.
The defense has tried to show jurors that it was common
practice among bond traders like Litvak to misrepresent prices
in an effort to boost profit.
They also tried to show that this activity wasn't a crime,
and that Litvak's supervisors condoned it until faced with the
potential loss of a major client such as AllianceBernstein.
Litvak was fired in December 2011, three years after joining
Jefferies. He was criminally charged in January 2013.
With jurors out of the courtroom, defense lawyers on Tuesday
tried to admit additional documents to show that former Litvak
supervisors including Johan Eveland, a co-head of fixed income
who testified at the trial, looked the other way when other
traders engaged in the same practices as the defendant.
Hall, however, agreed with prosecutors that the documents
could not be admitted because they were "not tied to any
testimony, lack relevance and would be confusing to the jury."
Closing arguments were scheduled for Wednesday morning.
Litvak has pleaded not guilty to 10 counts of securities
fraud, four counts of making false statements and one count of
fraud connected to TARP. If convicted, he faces up to 20 years
in prison on each securities fraud count. A U.S. Securities and
Exchange Commission civil lawsuit is also pending.
Jefferies is now part of Leucadia National Corp.
The cases are U.S. v. Litvak, U.S. District Court, District
of Connecticut, No. 13-cr-00019; and SEC v. Litvak in the same
court, No. 13-00132.