| June 30
June 30 U.S. prosecutors have recommended that
Jesse Litvak, the former Jefferies Group Inc trader convicted of
defrauding investors in mortgage bond trades after the financial
crisis, be sentenced to nine years in prison and a $5 million
Litvak's lawyers countered by requesting a maximum 14-month
sentence, saying their client does not deserve a prison term
"approaching those of the worst white collar offenders in recent
They also said no restitution was justified, and that
Litvak, 39, a married father of two, derived no personal gain
from his activities.
Both requests were made on Friday with the U.S. District
Court in New Haven, Connecticut, where Litvak is scheduled to be
sentenced on July 23 by Chief Judge Janet Hall. Litvak has also
sought to have his conviction voided.
Prosecutors accused Litvak of swindling customers out of
more than $2 million from 2009 to 2011 by inflating bond prices,
lying about what Jefferies paid for bonds and inventing sellers.
On March 7, jurors convicted Litvak on all 15 counts he
faced, including 10 counts of securities fraud.
The prosecution was the first under a law banning major
fraud against the United States through the $700 billion federal
bailout known as the Troubled Asset Relief Program. That law
was invoked because some of Litvak's clients joined a TARP
initiative designed to revive the mortgage bond market.
Jefferies, a unit of Leucadia National Corp, agreed
five days after the verdict to enter a nonprosecution agreement
and pay $25 million to settle criminal and civil probes into its
alleged failure to properly supervise traders.
In their sentencing request, prosecutors said Litvak "knew
that lying to customers and ripping off their investors was both
immoral and criminal, and simply did not care."
They said stiff punishment was needed to deter others in the
industry from believing that such fraud is "business as usual."
Litvak's lawyers have argued that his former clients were
sophisticated enough to know whether they were traded fairly,
and that the defendant's activity was common in the industry.
The request for leniency was backed by more than 100 letters
submitted on Litvak's belief.
Ross Garber, a lawyer for Litvak, did not immediately
respond on Monday to requests for comment.
The case is U.S. v. Litvak, U.S. District Court, District of
Connecticut, No. 13-cr-00019.
(Reporting by Jonathan Stempel in New York; Editing by Leslie