August 1, 2018 / 9:46 PM / 2 years ago

U.S. fraud case against bond trader Litvak is dismissed

(Reuters) - A federal judge on Wednesday dismissed the final criminal charge against former Jefferies trader Jesse Litvak for allegedly lying to customers about bond prices, ending the government’s long-running case.

Chief Judge Janet Hall of the federal court in New Haven, Connecticut, granted prosecutors’ request to drop the fraud charge in “the interests of justice,” after Litvak’s two prior convictions had been overturned on appeal.

In January 2013, prosecutors accused Litvak of causing customers to overpay for bonds they bought and accept lower prices for bonds they sold. They said Litvak did this to generate $2.25 million of extra profit for Jefferies and boost his own pay.

Litvak, 43, who worked in Jefferies’ office in Stamford, Connecticut, said his communications were proper and customers would have known if he were lying.

Jefferies is now part of Jefferies Financial Group Inc.

A lawyer for Litvak was not immediately available for comment.

His convictions were overturned by the federal appeals court in Manhattan, which found errors in the admission of evidence at each of his trials.

Litvak was serving a two-year prison term when the second conviction was overturned on May 3, and was promptly released.

Five defendants, including Litvak, have been tried in the government’s crackdown on suspicious sales tactics on Wall Street since it was announced in January 2013.

Two had their convictions set aside, two were acquitted, and the fifth was acquitted on all but one count, where jurors deadlocked.

Reporting by Jonathan Stempel in New York; Editing by Bill Berkrot

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