NEW HAVEN, Connecticut (Reuters) - 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 Wednesday.
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 and commissions.
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.
Additional reporting by Jonathan Stempel in New York; Editing by Tom Brown